Bitcoin (BTC) Price Could Surge — or Not, Warns CryptoQuant

A notable divergence has recently formed between the Coinbase (NASDAQ:COIN) Premium Index and Bitcoin's price, as sighted by CryptoQuant.

A divergence has emerged between the Coinbase (NASDAQ:COIN) Premium Index and Bitcoin's price, as noted by CryptoQuant. This divergence leans toward the negative side despite the substantial rally in the price of Bitcoin.

Surging Bitcoin price and declining Coinbase Premium Index

Over the past two weeks, a divergence has formed between the Coinbase Premium Index and Bitcoin's price. This divergence comes as BTC's price rose from $94,000 to $108,000. The flagship cryptocurrency now trades at $104,097.77, down 2.4% at the time of writing.

To provide some context, the Coinbase Premium Index showcases the demand for Bitcoin in the United States. It is calculated by monitoring activity on the leading American cryptocurrency exchanges Coinbase and Binance. A higher premium indicates increased buying demand from U.S. investors.

The decline of Coinbase Premium is posing a significant concern. This comes at a time when North American investor demand has continued to rise. The launch of Bitcoin Exchange Traded Funds (ETFs) in January 2024 and the recent macroeconomic climate have shifted sentiment.

According to blockchain analytics platform CryptoQuant, "If the U.S.-based demand has not supported this price surge, it could indicate an underlying weakness in medium-term upward momentum."

Based on this outlook, investors are advised to remain cautious and monitor this development closely.

Bitcoin price could surge — or not

Despite the reversal in price amid ATH rallies, the market is hopeful of a major rebound in the near term. From the midterm point of view, the focus is now on the weekly candle's closure at the $105,149 level.

If a false breakout occurs, the Bitcoin price risks dropping to a new low of $100,000.

This article was originally published on U.Today