Coinbase Premium Index Shows Bizarre Shift, Is Bitcoin Price at Risk?

Key Insights:

• Bitcoin price recently neared the July peak at $123,000 before the Coinbase Premium Index flips negative.
• Analysts are watching the $123,000 resistance and $118,000 support levels closely.
• Institutional buying remains strong amid high market volatility.

Bitcoin price started the week on a positive note, soaring past the $122,000 mark just before the Coinbase Premium Index turned negative.

Notably, this has raised questions among market participants over possible price changes ahead. The shift came during strong buying from institutions and firms building corporate Bitcoin treasuries.

Amid the broad market uncertainty, traders are now watching key support and resistance levels for the largest digital asset.

Coinbase Premium Index Turns Negative After Bitcoin Price Surge

The price of Bitcoin climbed sharply on Monday, reaching $122,319 before showing signs of cooling.

The rise was driven by strong demand from institutional investors and corporate treasury buyers.

It is important to mention that this brought the Bitcoin price close to its mid-July high of $123,091.

Likewise, shortly after this price increase, the Coinbase Premium Index turned negative.

This index measures the price difference between Bitcoin on Coinbase Pro’s USD market and Binance’s USDT market.

A negative reading can mean that selling pressure is stronger on Coinbase than on Binance.

Market observer Maartunn, an on-chain analyst at CryptoQuant, noted the shift and suggested it could point to a “pump and dump” pattern.

While no direct cause was confirmed, the change drew attention as it followed a fast price rally.

The rise happened after Bitcoin spent the week under $115,000. Traders had been waiting for it to break higher, and the jump gave the market new energy.

More importantly, a golden cross pattern also reappeared on Bitcoin charts, which some traders use as a bullish signal.

Bitcoin Price Support and Resistance Levels in Focus

Meanwhile, analyst Rekt Capital pointed out that Bitcoin regained the $117,200 level earlier in the day.

Notably, this level had acted as resistance in earlier sessions. The next barrier stood at $123,000, with $125,000 seen as the next target if the coin surmounts this level.

Some market participants expect a push beyond recent highs, but volatility remains high. Leveraged traders face liquidation risks if prices reverse quickly.

Large holders are watching the $118,000 mark as a possible support level should the price continues to face a pullback.

Benjamin Cowen, a market analyst, said that Bitcoin had often closed the month of August higher in past years.

With two weeks left in the month and important inflation data due this week, traders are keeping a close eye on how the market reacts.

Institutional Interest and Market Outlook

It is important to add that the wider market this August had seen strong involvement from institutions.

Exchange-traded products linked to Bitcoin gained more visibility, with more firms adding them for clients.

Corporate treasuries were also active in adding Bitcoin to their reserves. For example, Michael Saylor hinted at a new Bitcoin buy for Strategy.

Pierre Rochard, a Bitcoin strategist, said that the usual four-year halving cycle might no longer play a major role in price movement.

With 95% of Bitcoin supply already mined, he said that buying from long-term holders and institutions was now more important than mining-related supply changes.

The sudden shift in the Coinbase Premium Index did not confirm a change in the trend but suggested a possible change in activity on one of the biggest U.S.-based exchanges.

Whether it reflected short-term profit-taking or the start of a new pattern will be seen in the coming sessions.

Analysts said that if Bitcoin price can break through $123,000 and hold above it, it could open the way to fresh record highs. If not, the market could retest lower support levels around $115,000.

With inflation data and broader economic factors still in play, the next moves may depend on both technical signals and macro trends.