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Bitcoin ’seller pressure’ pushes Coinbase premium index to 12-month low
The Coinbase premium index — a metric used to gauge Bitcoin retail demand in the United States — fell to its lowest level in 12 months as 2024 drew to a close, with an analyst warning it could pose a challenge to short-term price recovery.
“The increasing seller pressure in the US market has significantly impacted the Coinbase Premium Index, dragging it to new lows,” CryptoQuant contributor Burakkesmeci said in a Dec. 31 analyst note.
Low-liquidity market
The Coinbase premium can be used to gauge Bitcoin $Bitcoin (BTC.CC)$ demand from US retail investors. A rising value indicates more buying pressure and a negative value hints at selling pressure.
On Dec. 31, it fell to its lowest point of - 0.23. On the same day, Bitcoin briefly dropped to $91,479, its lowest point since Nov. 27. Burakkesmeci attributed this to a “low-liquidity market at year-end.”
The last time the premium reached this level was in January 2024, around the same time spot Bitcoin exchange-traded funds (ETFs) launched in the US.
It came close to this range again in late October, just before the US elections, hitting -0.20 when Bitcoin was trading around $68,165, according to CoinMarketCap.
Burakkesmeci said this could pose challenges for Bitcoin’s short-term price recovery unless there is a “shift in macroeconomic conditions” or a surge in interest from institutional or retail buyers.
A key macroeconomic event the crypto industry is closely watching is US President-elect Donald Trump’s inauguration on Jan. 20.
Some analysts say Bitcoin’s rally will eventually continue post-inauguration after an initial stall. According to Ryan Lee, chief analyst at Bitget Research, the BTC price may correct by as much as 30% before resuming its bullish run.
Long-term holders in significant profits
Meanwhile, Bitcoin long-term holders — those who have held their Bitcoin for over 155 days — are sitting on significant profits.
This could increase the risk of further sell-offs as investors may look to cash out and take profits into the new year.
The long-term holder’s realized price is $24,298, representing about a 290% profit margin if they were to sell at the current price at publication, $94,820, according to Bitbo data.
However, the average cost-basis for short-term holders — those holding Bitcoin for less than 155 days — is significantly higher.
The short-term holder’s realized price stands at $86,753, reflecting a 9.29% profit if they were to sell at the current price at the time of publication.
The Coinbase Premium Index fell due to “increased sell-side pressure” in the U.S. market, reaching its highest level since January 2024, check it out. https://invest.sg.moomoo.com/cryptotrade
Disclaimer: Community is offered by Moomoo Technologies Inc. and is for educational purposes only.
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