BTC Coinbase Premium Turns Negative Yet Again: What Does This Mean?

Jul 25, 202414:56 UTC

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Coinbase Bitcoin Premium Index, i.e., the delta (percent difference) between the Coinbase Pro price BTCUSD pair) and the Binance price BTCUSDT pair), dropped to sub-zero zones after a very short "green" period. Analysts cite this as a signal of investor demand vanishing.

US Bitcoiners in disbelief: Coinbase premium negative yet again

Bitcoin Coinbase Premium Index plummets to -0.05 value after spending a few days in the positive zone. CryptoQuant's community analyst @IT_Tech_PL, a host of the IT Tech Crypto community, indicates that this is a signal of decreasing demand from U.S. investors.

#BItcoin Coinbase Premium Index has turned negative, indicating decreasing demand from US investors. pic.twitter.com/mmZ0uINu2t— IT Tech (@IT_Tech_PL) July 25, 2024

During periods of peak euphoria prior to Bitcoin BTCUSD reaching its current all-time high, Coinbase Premium Ratio spiked to 0.4. When Bitcoin BTCUSD dumped in Q2, 2024, the indicator touched the -0.3 level twice, indicating deep pessimism among U.S. buyers.

For most of this year, the metric has been in deep red. However, amid the general sentiment upsurge based on the approval of spot Ethereum ETFs, Coinbase buyers were greedy.

Bitcoin BTCUSD, the largest cryptocurrency, is down by 3.6% today. Right now, the orange coin is struggling to stay above $64,000 on major spot exchanges.

The Cryptocurrency Fear and Greed Index is still sitting in the "Greed Zone" despite losing six points in four days. The indicator dropped to 68/100 today.

$300 million in crypto liquidated, 91% longs

Overall cryptocurrency market valuation lost 5% overnight in the sharpest drop in recent months. The aggregated capitalization of BTC and altcoins plunged to $2.3 trillion.

Almost all of the top 100 cryptocurrencies are in red today, with dozens of them posting double-digit losses. Ethena (ENA) and Celestia (TIA) are the worst performers with 12-16% losses.

Such a rapid plunge resulted in a cascade of liquidations. In the last 24 hours, over 78,000 traders saw their positions erased, with the net sum of liquidations touching $300 million in equivalent. Nine out of 10 liquidated positions were longs, CoinGlass data shows.