Bitcoin's US Demand Flashing Warning Signs
The Coinbase Bitcoin Premium Index has been negative for ninety days, indicating sustained spot weakness in the U.S. market. This index calculates the price difference between Bitcoin on Coinbase and Binance, providing an estimate of buying or selling pressure from the U.S. side.
At press time, the index stood at ‑0.1066%, according to Coinglass. A negative reading indicates that Bitcoin is trading at a lower price on Coinbase than Binance.
The sustained weakness in spot prices has led to concerns about the bearish sentiment in the market. The price of Bitcoin dropped from around $79K in May to $62,923.64 at the time of writing.
Additionally, the Relative Strength Index (RSI) remained largely below the neutral level during this time, echoing the bearish sentiment. Bollinger Bands also supported the volatility that prevented the price from hitting a high bullish threshold.
The removal of buy orders and shifting of bids lower has eroded the buy-side support below the current price of Bitcoin. This means that if sellers become more aggressive, Bitcoin may move lower more readily.