Seller Pressure From US Investors Drags Coinbase Bitcoin Premium Index To 12-Month Low – CryptoQuant

The positive seasonality that is known to affect the bitcoin market during the last quarters of every year in half is disappearing, as seen in the price movements of BTC over the past two weeks. This trend is often driven by high investor demand; however, recent data shows that these market participants have slowed down in their acquisition of BTC.

The drop in demand, especially from US investors, is seen in the Coinbase Premium Index, which fell to a level not seen in the past 12 months.

Coinbase Premium is falling again

According to a report by CryptoQuant official Burakkesmeci, the Coinbase Premium Index, which monitors demand for BTC from US retail investors, has fallen to -0.237, its lowest point since December 2023.

This metric dropped to -0.200 on October 25, 2024, shortly before the US presidential election, due to increased uncertainty about the outcome of the political race. However, the indicator rose above 0.15 a few weeks later as BTC rose above $100,000 following President Donald Trump’s election victory.

The latest drop in the index came when BTC fell below $92,000 to around $91,300 at the start of the current business week. Burakkesmeci said the index was also affected by a low-liquidity bitcoin market at the end of the year and increased seller pressure on US soil.

Room for price demonstration?

Exits from the US-based Bitcoin exchange-traded fund (ETF) market show that US investors have been selling their BTC. Those products bled roughly $700 million in two of the last three trading days of the year, and even on the day of entries, they collectively saw a paltry $5.3 million in injected capital.

Even in the four days leading up to Christmas, Bitcoin ETFs lost more than $1.37 billion as investors scrambled to withdraw their funds. Burakkesmeci’s analysis indicates weak institutional demand and cautious sentiment among US bitcoin investors.

“This decline not only indicates a lack of institutional demand, but also underscores cautious sentiment among US investors. These trends may create a challenging environment for Bitcoin’s near-term price recovery unless we see a change in macroeconomic conditions or renewed interest from institutional or retail buyers,” the analyst said.

However, a drop in the Coinbase Premium Index indicates room for price growth, meaning bitcoin’s value could see a recovery before long.

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