By Marcus Sotiriou, Analyst at the publicly listed digital asset broker GlobalBlock
Bitcoin remains around $22,000, as it hovers around a critical region. For the rally to continue, bulls want to see the price hold above $21,500 which is in confluence with the 20-day moving average. Since Bitcoin’s plummet from $45,000, this moving average has had 6 retests and 6 rejections, so the $21,500 is a must hold price level. If the price fails to successfully retest and flop the daily trend after a 60% drop in 4 months, this would be a telling sign of weakness in the market.
There are some signs that we could have continuation to the upside, as the Coinbase Premium Gap has surged to positive values over the past week. The Coinbase Premium Gap is an indicator that measures the difference between the Bitcoin price on Coinbase and the price on Binance.
This indicator has been negative for several months during the market downtrend, showing that the Bitcoin value on Coinbase has been less than Binance. However, data from Crypto Quant shows that recently the Coinbase Premium Gap has spiked significantly. This could be a sign that U.S. investors are buying Bitcoin more than the rest of the world, as Coinbase is mainly used by U.S. investors.
This could also infer that institutions are becoming more aggressive buyers, as Coinbase has a bigger institutional percentage of users compared to Binance – institutional buy pressure is always a positive sign for bulls.
The fact that this indicator has risen, whilst terrible news is no longer negatively impacting the market, could be a sign that we may see further upside over the coming weeks.