The price of bitcoin has fallen in recent days, dropping below $30,000 — are whales selling on Coinbase?
The largest US-based cryptocurrency exchange’s BTC premium has dropped to negative levels not seen in over three years.
This comes amid a broader market drop, implying that whales and larger players have used Coinbase to dump significant amounts of bitcoin.
Larger investors selling their assets
Larger investors selling their assets on Coinbase, according to the analytics resource.
CryptoQuant, a blockchain analytics firm, evaluates the BTC price on two of the top crypto exchanges – Binance and Coinbase – against Tether and USD, respectively, to see if there’s a “Coinbase Premium” difference.
This measure analyzes institutional and larger-cap players’ (whales) BTC movements on Coinbase (and Coinbase Pro), which is widely regarded as the go-to platform for such investors.
This essentially means that the higher the premium, the greater the institutional demand, and vice versa.
This statistic has dropped dramatically since the beginning of the month, according to reports. It had been in the “green” for several months, as shown in the graph below, but then sank to its lowest point in 35 months.
“This is hardly surprising given that financial markets are currently trading risk-off. In such a scenario, I would anticipate traditional finance investors, in particular, to limit their exposure to bitcoin.”
The END of Bitcoin
As the whole cryptocurrency market, driven by BTC, went south, the Coinbase Premium Index turned negative. The principal digital asset dropped by $4,000, from $40,000 to $36,000, just days after the first evidence of substantial sales on Coinbase.
This only lends credibility to the argument that whales and institutions were the primary drivers of the latest decline.
As a result, it will be interesting to see how Coinbase Premium performs over the next week or two.
However, its value continued to plummet in the days after, with a dramatic price drop to $25,300 (on Bitstamp) earlier today.
This is the lowest price for Bitcoin since late December 2020. With double-digit decreases, alternative coins are in much worse shape.