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Coinbase Premium Index rebounds, pushes Bitcoin to $98K – Recovery odds?
The recent surge in the Coinbase Premium Index has sent a clear signal that institutional demand for Bitcoin (BTC) is on the rise. This development has resulted in a significant push of the cryptocurrency’s price to nearly $99,000.
Prior to this rebound, the index had dropped to a 12-month low due to risk-off approaches by both retail and institutional investors during the holiday season. However, it seems that U.S-based buyers have regained dominance in the market, as evidenced by the Coinbase Premium Index reclaiming its key 14-day Simple Moving Average (SMA) for the first time in nearly a month.
As highlighted by CryptoQuant analyst Burak Kesmeci, “When Coinbase Premium Index surges above SMA14, signaling Bitcoin buyer dominance, this event is an early indicator that U.S.-based buyers are regaining dominance in the market.”
The data further suggests that the recent upsurge was driven not only by institutional demand but also by a liquidity hunt as numerous short positions were located at the $98k-level earlier in the week. This, in turn, has resulted in upside liquidity becoming concentrated between $99k and $100k.
On the other hand, lower liquidity levels have been observed at $97.2k, $96k, and $95k. Given that more liquidity seems to be concentrated on the lower side of the price action at this time, a drop towards $97K-$95K cannot be entirely ruled out.
In conclusion, it is imperative for investors to take note that while institutional demand may have pushed Bitcoin’s price higher, further growth may be constrained due to the concentration of liquidity levels.
Source: ambcrypto.com
