Coinbase’s Premium Index Gains ground first time in 2025, market still cautious

The Coinbase Premium Index, a key indicator of US investor sentiment, rose above zero in 2025, coinciding with the price of Bitcoin surpassing $102,000 on January 7.

The Coinbase Premium Index measures how over- or under-traded Bitcoin (BTC) is on Coinbase compared to other major exchanges. The latest CPI change signals increased demand for BTC among US traders and institutions, signaling a notable shift in market dynamics.

A positive CPI indicates that BTC is trading at a premium on Coinbase; This reflects strong buying interest from US investors, particularly institutions and ETF participants. In contrast, a negative CPI typically indicates selling pressure or declining demand in the U.S. market. Since Coinbase is one of the most popular trading platforms in the United States, price trends are often considered a leading indicator of global market sentiment.

The starting point for understanding how the CPI turns positive is critical in terms of timing and broader impacts. Simultaneously, a massive outflow of 4,012 BTC was recorded from Coinbase at 18:04 local time; This implies that institutional investors are increasingly moving BTC from exchanges to personal wallets; In most cases this is seen as a long term ‘HODL’ strategy and such people are highly confident in the future price movements of the asset. CryptoQuant analyst Burak Kesmeci also pointed out this.

Bitcoin’s price rise above $102,000 is in line with this positive sentiment. CPI is considered an early indicator of US investor behavior and underscores the role of the US market in driving BTC price trends. Additional metrics such as open interest and on-chain data, combined with the CPI returning to positive territory, reveal a more bullish outlook for Bitcoin in 2025.

However, the general trend in funding rates indicates a more cautious stance in derivative markets. Glassnode reported that the weekly moving average of perpetual funding rates stands at 0.009%, slightly below the neutral threshold of 0.01%.

This marks a decline from a peak of 0.026% in mid-December and suggests investors are waning in their willingness to pay premiums for leveraged long positions.

📉 After peaking at 0.026% in mid-December, the weekly MA for permanent funding rates has fallen to 0.009% – just below neutral 0.01%: https://t.co/CORjRx0X2k

🔍 This indicates a cautious position as speculators show limited willingness to pay premiums for a long period of time… pic.twitter.com/JwSPpZRpeG

— camnode (@glassnode) January 7, 2025

This cautious positioning in the derivatives market indicates that speculative appetite for high-risk leveraged positions remains weak as US investors drive spot market activity. The divergence between positive CPI and low funding rates indicates a divergence in market behavior: spot markets are trending upward, while futures markets maintain a more measured outlook.