Bitcoin poised for short-term rally as Coinbase Premium signals bullish momentum

Bitcoin has yet to rise above the long-awaited $70,000 despite several notable upside moves.

However, the data points to short-term bullish potential for BTC, based on the Coinbase Premium Index. In such a scenario, the crypto asset could see a possible price rally.

Bitcoin Price Recovery Soon?

Examining the Coinbase Premium Index over a 1-hour period, CryptoQuant analyst ‘Yonsei_dent’ observed significant price movements when the daily (24-hour) moving average exceeds the weekly (168-hour) moving average.

Historical data shows that this crossing, which often forms a golden cross, tends to lead to short-term price increases. Currently, the daily moving average has temporarily exceeded the weekly moving average. This indicates potential upside momentum.

With the price of bitcoin around $67,000, a key support level tied to the September high, and a consistent pattern of higher highs and lows since August, the analyst predicts that the market is building a clear structure to the rise

A similar sentiment was echoed by analysts at Kaiko, who singled out negative Kimchi Premium. This, in fact, could also indicate a potential rally ahead for bitcoin despite the current slump in the South Korean market.

This premium measures the difference in BTC prices between Korean exchanges and global platforms, and has now turned negative for the second time since September. The trend reflects declining investor sentiment in South Korea, where BTC is trading lower even as global prices rise.

Contributing factors include strict government capital controls that limit foreign trading on local exchanges and a limited supply of cryptocurrencies available on platforms like Upbit, which offers far fewer coins than its global counterparts. Historically, a negative Kimchi Premium has often preceded significant increases in the price of bitcoin.

Increase in retail participation

It is also important to note that BTC is experiencing a notable resurgence of retail activity on the chain after a four-month period of low engagement. On-chain transaction volume under $10,000 has increased, indicating renewed interest from smaller, non-institutional investors.

Over the past 30 days, retail demand has increased by 13%, marking a significant recovery compared to previous months of decline. This level of participation resembles activity levels in March, when BTC approached its most recent all-time high.

While whale trading remained strong during the lull, the recent rise in bitcoin prices suggests a reduction in risk aversion among retail investors, which may lead to increased retail momentum in the market

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