Troubling signs for Bitcoin as U.S. investors pull back

[NewspaperD2]

The Bitcoin market is showing signs of subdued activity as the summer season draws to a close, with key indicators pointing to a lack of strong demand. The Coinbase premium index, which measures the buying pressure of US investors through the price difference between Coinbase Pro (USD pair) and Binance (USDT pair), has recently taken a significant dip.

Typically, a surge in premium values indicates robust buying activity. However, the recent drop coincides with Bitcoin's decline below the $29,000 threshold, mirroring a previous low witnessed after the FTX collapse. This suggests that the selling pressure is originated from Coinbase, often associated with US investors.

Further supporting the notion of limited spot demand is an unusually low spot-to-futures ratio, which has reached a five-year low. Dylan LeClair, an analyst at Bitcoin Magazine, points out that derivative traders have gained prominence in the market, a theory substantiated by the year-to-date peak in open interest.

LeClair notes that those holding a bearish stance in the spot market have diminishing their coin reserves. cause, spot market bulls either have their holdings fully committed or are waiting in the wings within traditional finance (TradFi), anticipating the approval of a

A Bitcoin price slowdown during the tail end of summer is accompanied by noticeable trends indicating subdued demand. The Coinbase premium index, a gauge of buying pressure from US investors calculated by comparing Coinbase Pro (USD pair) and Binance (USDT pair) prices, has shown a significant decline.

Usually, a surge in premium values reflects strong buying activity. However, the recent drop corresponds with Bitcoin's slide below the $29,000 level, echoing a previous low seen after the FTX collapse. This suggests that the selling pressure originates from Coinbase, a platform favored by US investors.

Further underscoring the limited spot demand is an unusually low spot-to-futures ratio, which has reached a five-year low. Dylan LeClair, an analyst at Bitcoin Magazine, emphasizes that derivative traders have gained prominence in the market, a notion substantiated by the year-to-date peak in open interest.

LeClair observes that those with a bearish outlook in the spot market have diminishing their coin reserves. On the other hand, those bullish on the spot market have either fully committed their holdings or are awaiting developments within traditional finance (TradFi), anticipating the potential of an ETF.