Bitcoin drops below $58,000 as Coinbase users start selling
Bitcoin (CRYPTO:BTC) has experienced a sharp decline, falling below the $58,000 mark as selling activity on the Coinbase exchange picks up.
The cryptocurrency hit a low of $57,100 over the weekend, a level not seen since mid-August, indicating that bearish trends are still influencing the market.
Data shows that Bitcoin users on Coinbase have been selling their holdings recently, which may be contributing to the recent price drop.
The Coinbase Premium Index, an indicator that measures the percentage difference between Bitcoin prices on Coinbase (USD pair) and Binance (USDT pair), has recently turned negative.
When this index is positive, it suggests a higher price for Bitcoin on Coinbase compared to Binance, indicating higher buying pressure or lower selling pressure on Coinbase.
Conversely, a negative index value suggests increased selling pressure on Coinbase, as the Bitcoin price there is lower than on Binance.
The recent trend in the Coinbase Premium Index reveals that it has dipped below zero in the past few days.
This negative shift in the index has coincided with Bitcoin’s price decline, suggesting that the selling activity by Coinbase users could be a driving factor behind the latest drop.
Previously, the index had remained in positive territory since the price crash under $50,000 in early August, supporting Bitcoin’s recovery during that period.
The behavior of the Coinbase Premium Index is significant because Coinbase is a preferred platform for American institutional investors.
When the index moves in a particular direction, it often indicates a shift in the trading behavior of these large investors.
As a result, changes in the index can directly impact Bitcoin’s market value.
This pattern has been observed several times this year, as Bitcoin's price closely follows movements in the Coinbase Premium Index.
The recent turn towards selling by investors on Coinbase, as indicated by the negative shift in the Coinbase Premium Index, seems to have played a role in Bitcoin's recent plunge.
The market will likely continue to monitor this trend to gauge the potential direction of Bitcoin’s price in the coming days.
At the time of writing, the Bitcoin (BTC) price was $59,276.33.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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