Bitcoin’s Coinbase Premium has plunged to a four-year low, a level last recorded in November 2022 after FTX’s implosion, when BTC was approaching a market bottom. The latest drop comes amid renewed market turmoil following reports of a historic $6.4 billion security breach involving Binance, the largest cryptocurrency theft on record.
However, one prominent crypto analyst believes the extreme bearish sentiment could signal a potential opportunity rather than further trouble for Bitcoin.
BTC’s Coinbase Premium Hits FTX-Era Low; Bullish or Bearish for BTC?
CryptoQuant CEO Ki Young Ju has highlighted a striking Bitcoin market signal after the Coinbase Premium plunged to its lowest level in four years, reviving memories of the November 2022 market bottom following the collapse of Sam Bankman-Fried’s FTX empire. As you may recall, BTC eventually bottomed out around $15,500 to $16,000.
The premium measures the difference between Bitcoin’s dollar price on Coinbase and its USDT-denominated price on Binance. CryptoQuant’s Coinbase Premium Index tracks this gap as a percentage of Bitcoin’s price. The latest reading on the chart stands at approximately -0.2%, equivalent to a price gap of roughly $156 based on Bitcoin’s displayed price of $77,900.
Coinbase is often viewed as a barometer of U.S. investor demand, particularly among institutional players and dollar-based traders. A sustained negative premium suggests Bitcoin is trading cheaper on Coinbase than on Binance, potentially signaling stronger selling pressure from U.S. market participants or a lack of fresh buying interest. While the indicator does not reveal investor behavior with certainty, it points to relatively weak demand on a key U.S. trading platform.
While the indicator currently reflects weakening buying pressure from U.S. investors, Ju believes sentiment has become so bearish that it could present a contrarian bullish opportunity for Bitcoin, even as renewed turbulence linked to the reported Binance security breach rattles the broader crypto market.
“Market sentiment is bearish enough to be bullish, imo,” CryptoQuant CEO Ki Young Ju wrote on X, sharing the following chart.
Bitcoin Crashes Below $77,000 as Crypto Sell-Off Intensifies
Bitcoin has plunged more than 5% to sub-$77,000 as panic surrounding the reported $6.3 billion Binance security incident weighs on market sentiment. The weakening Coinbase Premium Index suggests U.S. trading activity is offering little support as Bitcoin grapples with mounting market uncertainty.
Notably, Binance has pledged to cover all losses linked to the incident using its own funds. The exchange reportedly set aside more than $6.34 billion to address the fallout, including $5 billion held in the exact token assets affected by the incident.
At press time, Bitcoin was trading at $76,739, according to CoinGecko. Meanwhile, the Crypto Fear and Greed Index dropped to 30, placing market sentiment firmly in the “Fear” zone and marking its lowest reading since Aug. 14.
That said, positive developments in the coming days could help restore confidence and support a rebound. However, traders may remain cautious until Binance withdrawals resume and greater clarity emerges about the incident’s broader implications for the crypto market.
from ZyCrypto https://ift.tt/wSRpHmA
0 Comments