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Coinbase Premium Flashes Warning Signs for Ethereum’s Price – Explained
The cryptocurrency market has been experiencing significant fluctuations in recent times, with many assets struggling to maintain their value. Ethereum (ETH) is no exception to this trend, and the latest data from Coinbase Premium suggests that there may be further price drops ahead.
According to the data provided by CryptoQuant, the Coinbase Premium for ETH has been in negative territory for most of the past month. This metric tracks the percentage difference between Ethereum prices on Coinbase and Binance, offering valuable insights into the behavior of U.S-based investors. The negative premium observed suggests that there is greater selling pressure and weak buying from American traders.
Furthermore, the price action seen over the past two months has highlighted caution and an eagerness to sell ETH. A range formation in the first half of December was unable to hold, as Bitcoin’s (BTC) crash from $108k to $92k led to a decline in ETH to just under $3.2k. As things stand, swing traders will need to see the $3.4k resistance zone reclaimed before they can adopt a bullish bias.
It is also worth noting that the drop in new addresses on the Ethereum network has been indicative of the wider lack of demand for the cryptocurrency. This further supports the bearish sentiment surrounding ETH’s price action.
Despite the ongoing struggles, however, whale accumulation continues to take place. In fact, a withdrawal of $30 million from Binance suggests that institutional investors remain committed to this asset.
Source: ambcrypto.com
