It’s common to assume that U.S. buyers, compared to buyers from other areas, are selling more frequently, which might be a sign of lower institutional demand in the United States. In the past a positive Coinbase Premium indicated a significant institutional buying power, which typically raises the price of Bitcoin. On the other hand, if the trend persists, a negative premium may indicate impending price volatility or even a downturn.
This low premium may indicate a halt in the upward momentum of Bitcoin, which has experienced a resurgence in recent months, particularly if significant institutional interest in the asset doesn’t resurface. After emerging from the previous downtrend channel $65,500 is a key support level for Bitcoin, which is currently trading close to critical levels.
If selling pressure keeps rising, a decline below this level could push Bitcoin down to test the $63,000 range, which is another important support level from recent trading activity. On the plus side, Bitcoin may aim for $72,000, which many analysts consider to be the next significant resistance level if buyers regain control and the Coinbase Premium turns positive.
A reversal in the premium index would indicate a resurgence of institutional confidence even though Bitcoin has demonstrated resilience around its current price levels. For the time being traders should monitor the $65,500 and $63,000 support levels because a breakdown there might portend more significant corrections.
This article was originally published on U.Today
Source: Cryptocurrency - investing.com
