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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 cryptocurrency market, pushing Bitcoin’s price past $98,000. The sudden rebound in demand has sparked renewed optimism about the prospects of a sustained recovery. However, experts caution that any further gains may be hampered by significant liquidity issues.
The Coinbase Premium Index, which tracks the difference between the prices on Coinbase and other major exchanges, has been steadily rising over the past week. This resurgence suggests a significant shift in demand from U.S-based buyers. The data suggests that institutional investors have taken up buying positions once again, with Coinbase reporting massive inflows into its Bitcoin ETFs.
The recent surge in demand is particularly noteworthy given the index’s recent decline to a 12-month low. However, some analysts caution that this sudden rebound may not necessarily translate to sustained gains for Bitcoin. The liquidity heatmap suggests that significant lower liquidity levels are present at $97.2k, $96k, and $95k.
While this development is certainly encouraging, it is crucial to note that the risk of a drop towards these levels cannot be ruled out entirely. The market may not have enough liquidity to support prices above $98,000 in the short term.
In conclusion, while this sudden surge in demand is certainly intriguing, investors should exercise extreme caution when considering any further purchases.
Source: ambcrypto.com
