Bitcoin Shows Early Relief as Coinbase Premium Index Rebounds

• Coinbase Premium Index spiked to near 0.5 after Bitcoin slipped to around $60,000.
• A bottom might be setting in for Bitcoin as the price begins to rebound.
• Bitcoin dropped to $60K for the first time since October 2024.

CryptoQuant founder Ki Young Ju has pointed to early signs that selling pressure in Bitcoin may be easing. In a recent post on X, he noted that the Coinbase Premium Index has rebounded from negative levels, indicating improving U.S. spot demand rather than a confirmed trend reversal.

Bullish Sentiment is Returning to Bitcoin

According to Ju’s post, as of Friday, February 6, the Coinbase Premium Index briefly spiked near 0.5 after Bitcoin dipped to around $60,000, before slipping back into the negative levels. While the move does not confirm a market bottom, it suggests that aggressive selling has weakened and that U.S.-based buyers are gradually re-entering the market.

For context, the Coinbase Premium Index measures the percentage price difference between Bitcoin on Coinbase Pro and Binance. It is a sentiment indicator, where a positive value, as observed by Ju, suggests strong buying pressure from U.S. institutional investors, while a negative value indicates selling pressure.

It is worth noting that the indicator focuses on Coinbase and Binance because of their respective demographics. It is common knowledge that institutional investors, particularly those based in the U.S., heavily utilize Coinbase, while Binance is a hub for the broader, global retail population of Bitcoin users.

What Bitcoin Traders Are Looking Out For

Bitcoin traders typically use the Coinbase Premium Index to determine what drives price. Depending on the metric’s behavior, they ascertain whether the cryptocurrency’s demand or supply is heavily reliant on institutional activities, spot-market buying, or retail-driven, global speculation.

In the meantime, Bitcoin has crossed the 50% pullback landmark after dropping to $60,000 for the first time since October 2024. The massive pullback from an all-time high triggered severe panic among crypto community members. However, the latest observation by Ju, which coincides with an emerging rebound, is boosting traders’ hopes as bullish sentiment returns to the Bitcoin market.

Related: What’s the Reason Behind Bitcoin’s Crash to $60K?