- Coinbase Premium Index hits 12-month low at -0.237
- Bitcoin price drops to $91,500 with low liquidity
- January events might determine market direction
The Coinbase Premium Index, a metric that tracks the difference in price between Bitcoin on Coinbase against other exchanges has reached its lowest level in 12 months. As the most prominent exchange in the United States, this data serves as a key indicator of demand for Bitcoin in the U.S.
This data was reported by “burakkesmeci” at CryptoQuant and reveals a potential momentary bullish outlook on the market. Just days before the U.S. election that prompted 2024’s Q4 bull run, the index dropped to -0.200 as the market was considered stagnant at the time.
And now, the index reached an even lower point at -0.237, signaling a potential end to the latest bullish trend. This decline in the Coinbase Premium Index coincides with the recent bearish movements on the Bitcoin market, with the world’s largest asset reaching below $91,500 over the course of the last week.
However, this doesn’t necessarily mean that the bull run is over. While it does signal a lack of institutional demand when compared to the recent past, it also is a reflection of the low liquidity seen in risky assets markets during the end-of-the-year festivities.
Furthermore, institutional investors may be collecting part of the profits gained during last year’s rally. Like so, there are reports of whale investors moving part of their BTC to cryptocurrency exchanges.
Adding to that sentiment is the fact that Bitcoin’s daily trading volume has averaged below $50 billion since Christmas, while only a couple of weeks prior the asset would see several high-volume days of up to $140 billion traded on a single day.
Market analysts still believe the bull run is not over due to there still being liquidity in the market. With a January filled with key events such as the U.S. Presidential Inauguration and the change of leadership in the SEC, January will serve as a testament of which kind of market investors may expect to see in 2025.
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