Buyers From Coinbase Powered Bitcoin Higher or Did They?

Bitcoin (BTC) has gained nearly 28% this month, hitting the very best since early November. The favored narrative on Crypto Twitter is that traders from Coinbase (COIN) have powered the cryptocurrency higher. Nonetheless, the Nasdaq-listed exchange hasn’t been the one source of bullish pressures for the cryptocurrency.

The Coinbase premium index, which measures the spread between Coinbase’s BTC/U.S. dollar (USD) pair and Binance’s BTC/USDT pair involving the tether stablecoin, turned positive last week and rose to 0.039 over the weekend, the very best since late October, per data sourced from blockchain analytics firm CryptoQuant.

In other words, the indicator suggests the buying pressure on Coinbase has been relatively stronger.

“The worth premium between Bitcoins traded on Coinbase vis-à-vis those traded on Binance (Coinbase-Binance premium) continued to be positive throughout the week, which is indicative of increased buying interest from institutional investors vis-à-vis retail investors,” André Dragosch, head of Deutsche Digital Assets, wrote in a note to clients.

Bitcoin traded at a premium on Coinbase relative to Binance. (CryptoQuant)

Institutions prefer publicly traded and controlled Coinbase over offshore entities like Binance, that are considered a proxy for retail investor participation. Binance is now taking steps to ascertain itself as an institutional-focused platform.

Nonetheless, one other indicator called the cumulative volume delta (CVD), which measures the web capital inflows into the market, suggests the rally began with Binance-based entities bidding for bitcoin with BUSD, a fiat-backed stablecoin issued by Binance and Paxos, within the perpetual futures market. And buyers from Coinbase and other exchanges joined the fray later.

A rising CVD means more buyers are in motion, while a negative-sloping line implies there are more sellers.

The chart sourced from and tweeted by pseudonymous analyst exitpump (@exitpumpBTC) compares the cumulative volume delta (CVD) for BTC/BUSD pair listed on Binance (yellow line) with the CVD BTC/USD and BTC/USDT pairs listed on other exchanges and Binance.

The yellow line has been trending upwards since Jan. 11, while the green line began rising three days later. In other words, bitcoin’s initial increase from $17,000 was mainly fueled by solid bidding in Binance’s BTC/BUSD market while buyers from other exchanges, including Coinbase, stepped in later.

“From my observations, it was mostly one entity [from Binance] bidding and absorbing sell pressure and attempting to make a breakout market buying and always eating the sell partitions with no signs of exhaustion, which result in short squeezes pumping the worth,” exitpump tweeted.

Meanwhile, other metrics, like the typical trade size, suggest an absence of clear leadership and an across-the-board uptick in whale activity.

“Regarding the typical trade size, there was a notable increase on Bitstamp, Kraken, Bitfinex and LMAX Digital and a slight increase on most other exchanges, including Binance, which suggest more whale-driven price motion,” Clara Medalie, research director at Paris-based crypto data provider Kaiko, told CoinDesk in an email.

The uptick indicates renewed whale participation. (Kaiko)

The uptick indicates renewed whale participation. (Kaiko)

The typical trade size on Binance has increased from $700 to $1,100 since Jan. 8.

Bitcoin modified hands at around $21,150 at press time, having risen nearly 22% last week. The rally stemmed from the idea that worse macroeconomic risks could also be behind us.

“It is not just the acceptance that peak inflation is behind us and that rates probably do not have that much further to rise. It is also that the majority sellers have been flushed out of the market,” Noelle Acheson, writer of the favored “Crypto Is Macro Now” newsletter, said within the weekend’s edition of the newsletter, explaining the worth rally.

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