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Massive Cryptocurrency Exchange halts selling Bitcoin, action affects market

*Experts says the Coinbase Premium Index will be one of many indicators showing a potentially upcoming bounce on the cryptocurrency market

Arman Shirinyan

Coinbase market makers are no longer selling Bitcoin, but it might not be enough for bounce

Massive Cryptocurrency Exchange stopped selling Bitcoin. Here’s how it affects the cryptocurrency market.

The Coinbase Premium Index is a tool for determining the difference between Bitcoin’s price on Coinbase Pro and exchanges like Binance. The premium or discount on the index tells us if institutional investors are actively selling or buying the spot asset, which is a direct indicator of market sentiment.

Previously, the CryptoQuant analyst noted that for the last 45 days, market makers at Coinbase were actively selling Bitcoin via trading bots since they have not had enough liquidity to satisfy the demands of their clients.

The main reason behind the spike in the discount was tied to Bitcoin’s massive plunge on the market, which resulted in a 40 percent devaluation of the digital gold.

But according to the same index now, institutional traders are no longer selling their holdings actively but buying relatively large volumes of spot BTC, which pushed the index into the premium zone.

It was the first time the indicator turned positive since April 2022 when the cryptocurrency market sell-off started.

The index would be one of many indicators that are showing a potentially upcoming bounce on the cryptocurrency market. Previously, indicators like funds flow into major funds and lenders, MVRV scores and four-year trends showed that Bitcoin is set for a reversal.

Unfortunately, even if every indicator on the market would show that it is time for Bitcoin to bounce, with the lack of inflows on the market, we will not see volatile upward movement on Bitcoin or any other cryptocurrency.

According to the volume indicator, traders and investors are not yet ready to push the asset in either direction as the trading volume on various centralized exchanges remains below the year’s average.(U.Today)

*Arman Shirinyan is a trader, crypto enthusiast and SMM expert.

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