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Coinbase Premium Index Rebounds, Pushes Bitcoin to $98K – Recovery Odds?
The recent surge in the Coinbase Premium Index has sent shockwaves throughout the crypto market, propelling Bitcoin’s value to a staggering $98.9k. While this sudden upswing may have caught some investors off guard, it also raises questions about the feasibility of a sustained recovery. In this article, we’ll delve into the current market trends and explore the probability of a prolonged upward trajectory.
Initially, it’s essential to understand that the Coinbase Premium Index rebounded significantly, indicating a substantial increase in U.S. demand for Bitcoin. This surge can be attributed to institutional investors re-entering the market following a risk-off approach during the holiday season. The data suggests that these institutions are once again willing to take on greater risk, which has led to a notable uptick in demand.
Further bolstering this narrative is the impressive $908M daily inflows recorded by U.S. BTC ETFs. BlackRock’s IBIT and Fidelity’s FBTC led the charge with inflows of $253M and $357M respectively. Meanwhile, Ark Invest’s ARKB trailed behind with $222M inflows. These staggering figures are a testament to the renewed institutional interest in Bitcoin.
However, this recovery may not be without its challenges. A closer examination of the liquidity heatmap reveals that there is a significant amount of short positions located between $99k and $100k. This concentration of short positions could potentially create obstacles for further upward momentum.
Moreover, the data suggests that lower liquidity levels are present at $97.2k, $96k, and $95k. These zones may lead to an increased probability of a drop in Bitcoin’s value towards these price points.
In conclusion, while it is difficult to predict with certainty whether Bitcoin will be able to sustain its upward trajectory, the recent Coinbase Premium Index rebound does indicate renewed institutional interest in the asset. However, this increase in demand must be balanced against the potential liquidity challenges and short positions present at certain price levels.
Source: ambcrypto.com
