Coinbase Premium Index Hits 12-Month Low: Here’s Implication for Bitcoin

The Coinbase Premium Index recently declined to a 12-month low, raising discussions about implications for Bitcoin (BTC).

In a recent Quicktake post, CryptoQuant analyst Burakkesmeci stated that this drop signals a lack of institutional demand for Bitcoin.

The analyst added that it emphasizes the cautious sentiment among US investors.

What is the Coinbase Premium Index, and Current Market Outlook

The Coinbase Premium Index tracks the price gap between Bitcoin on Coinbase Pro and Binance Exchange.

This index evaluates US investor demand relative to the global market, with negative readings indicating selling pressure.

Before the US presidential elections, the Coinbase Premium Index dropped to 0.200 on October 25, 2024.

– Advertisement –

However, on December 31, 2024, the index dropped to its lowest level in the past 12 months, reaching 0.237.

Burakkesmeci highlighted that the increasing seller pressure in the US market coincided with Bitcoin’s drop to $91,500. This comes amidst a low-liquidity market at year-end.

This drop signals a lack of institutional demand and creates a challenging environment for Bitcoin’s short-term price recovery.

The CryptoQuant analyst, however, noted that the selling pressure could reduce upon renewed interest from institutional or retail buyers.

He added that a shift in macroeconomic conditions could also change the current dynamics.

Key Bitcoin Price Trend to Watch in Coming Weeks

The 2025 BTC candle began with optimism, indicating a continuation of an uptrend following a consistent growth pattern since 2015.

At press time, Bitcoin’s price was trading at $97,337, up 3.72% in the last 24 hours.

As Bitcoin gears up for new highs, there are several trends to watch in the coming weeks. First, the US political landscape will shape Bitcoin’s future trajectory.

Many expect Donald Trump’s inauguration as US President on January 20 to positively impact Bitcoin’s price.

Ahead of his second term, Trump has repeatedly promised to make the US the world’s “crypto hub” and prioritize Bitcoin.

His administration may initiate policies that will foster Bitcoin adoption and attract funds in the sector. The President-elect is reportedly aiming for Bitcoin to reach a price of $150,000.

The spot Bitcoin Exchange-Traded Fund (ETF) market is another key trend to watch in the coming weeks.

The status of Bitcoin ETF flows indicates investor sentiment toward Bitcoin.

Huge inflows or outflows can provide insights into the broader adoption of Bitcoin in mainstream finance.

Bitcoin ETF and the Latest Price Forecast

However, the spot Bitcoin ETF market appears subdued in the past few days.

The Bitcoin ETFs recorded two consecutive days of substantial outflows before seeing inflows of $5.3 million on December 31, 2024.

Data from Farside Investors showed Fidelity’s FBTC saw the highest inflows, which amounted to $36.8 million.

On the other hand, BlackRock’s Bitcoin ETF recorded the highest outflows, which came in at $23.5 million.

Despite the subdued interest of institutional investors, the market continues to gain attention. Asset investment manager Bitwise recently announced plans to launch a new crypto ETF.

As the market ushers in a new year, several participants have forecasted bold price targets for Bitcoin.

While analysts at VanEck project Bitcoin to reach $180,000, those at Bitwise expect the coin to breach $200,000.