Bitcoin Falls Below $80,000: Coinbase Sellers To Blame?

Data shows the Bitcoin Coinbase Premium Gap has plunged into the red zone alongside the latest drop in the BTC spot price below the $80,000 level.

Bitcoin saw recovery surges above $82,000 on Sunday and Monday, but these spikes failed to set the tone for the week as BTC has since followed a downward trajectory. This decline observed an acceleration on Wednesday, with the cryptocurrency’s price even briefly sinking below $79,000.

Below is a chart that shows the price action that Bitcoin has experienced recently.

As is visible in the graph, Bitcoin has made some recovery from its low, as its price is now floating around $79,600, but compared to the Sunday high, it remains down about 3.3%.

Now, what was the cause behind the drop? The data of the Coinbase Premium Gap may provide some hints.

As pointed out by analyst Maartunn in an X post, the Bitcoin Coinbase Premium Gap has declined recently. This indicator measures the difference between the BTC spot price listed on Coinbase (USD pair) and that on Binance (USDT pair). When the value of the metric is positive, it means BTC is going for a higher rate on Coinbase than on Binance. Such a trend implies users of the former are applying a higher buying pressure (or lower selling pressure) than the latter’s traders.

On the other hand, the indicator having a sub-zero value suggests Binance investors may be applying a higher buying pressure as BTC is trading at a higher price on the platform.

Now, here is the chart shared by Maartunn that shows the recent trend in the Bitcoin Coinbase Premium Gap:

As displayed in the above graph, the Bitcoin Coinbase Premium Gap has dipped into the red zone recently, indicating that the asset has been trading at a discount on Coinbase. These negative values in the metric have coincided with the cryptocurrency’s pullback, a potential sign that selling pressure on the platform may have a role to play in it.

Bitcoin showing some correlation to the Coinbase Premium Gap isn’t a new development. In fact, it’s a pattern that has established itself in recent years. The reason behind it lies in the growing presence of the US-based institutional entities in the cryptocurrency sector, which happen to be the biggest users of Coinbase.

Movements in the indicator can correspond to selling/buying behaviors of these massive investors, which is why the price tends to react to them. It now remains to be seen how the metric will develop in the coming days and whether the distribution from the American whales will ease off.