The data shows that the Bitcoin Coinbase Premium Gap has widened after the asset rose to $74,000, a possible sign that the platform’s institutional users are backing the run.
Coinbase Premium Gap Bitcoin Reached $61 During Rally
In a recent thread on X, CryptoQuant community analyst Maartunn talked about the recent BTC rally and what might be behind it. “Several data points suggest that aggressive institutional demand is causing it to break,” Martunn said. One such indicator is Coinbase Premium Gap.
This indicator measures the difference between the Bitcoin price listed on Coinbase (USD pair) and the Binance price (USDT pair). The value of the metric essentially tells us about the difference in buying and selling behavior on the two cryptocurrency exchanges.
Coinbase has concentrated US traffic, with institutional entities being its main customers, while Binance is used by traders from around the world. Thus, when the Coinbase Premium Gap is positive, it may be an indication that US-based institutions are exerting higher buying pressure (or less selling pressure) than global users.
Previously, this indicator had a significant red value, indicating that the asset was trading at a discount on Coinbase, but recently it turned positive.
From the chart above, it can be seen that the Bitcoin Coinbase Premium Gap has seen a sharp increase along with the recent BTC price rally, which means that the accumulation on Coinbase has pushed the asset to a higher value than the global market. At the peak of this increase in the positive territory, this indicator reached 61 dollars. “This means that BTC on Coinbase was $61 higher than on other exchanges, a strong signal of US institutional buying pressure entering the market,” the analyst said.
Another factor that points to institutional participation in the rally is Hyblock data. As seen in the graph below, Hyblock shows an increase in time-weighted average orders (TWAP) from $10,000 to $1 million.
The TWAP order is a trading algorithm that divides a large order into smaller pieces and executes them at regular time intervals. “TWAP orders are typically used by large players who are very aggressive without market movement,” Martunn said. The cohort bought between $10,000 and $1 million through such orders, along with a rally worth $750 million worth of Bitcoin.
While institutions have shown demand, the analyst has warned of the risk of falling: an increase in the volume of leverage in derivative markets.
As shown in the chart, Open Interest, an indicator tracking the total volume of derivative positions, has risen rapidly for both Bitcoin and altcoins. “If support bids weaken, over-positioning can quickly unwind and increase volatility,” Martunn said.
BTC price
At the time of writing, Bitcoin is floating around $72,600, up nearly 6% over the past seven days.
