Bitcoin Recovers Back Above $68,000: Who Is Driving This Run?

Bitcoin has recently shown a recovery back above the $68,000 mark. Here’s who might be behind this rally, in line with on-chain data.

Bitcoin Coinbase Premium Gap Has Remained Negative Recently

As identified by an analyst in a CryptoQuant Quicktake post, the Coinbase Premium Gap has been declining alongside the recent price rise. The “Coinbase Premium Gap” here refers to an indicator that keeps track of the difference between the Bitcoin prices listed on Coinbase (USD pair) and Binance (USDT pair).

When the worth of this metric is positive, it means the value of the asset is currently higher on Coinbase than Binance. Such a trend suggests the buying pressure is higher or the selling pressure is lower on the previous than the latter.

Alternatively, the indicator being negative implies the users of Coinbase could also be participating in a better amount of selling than the Binance ones as BTC is trading at a lower rate on there.

Now, here’s a chart that shows the trend within the Bitcoin Coinbase Premium Gap during the last couple of days:

As displayed within the above graph, the Bitcoin Coinbase Premium Gap has had a negative value recently, which suggests the Binance users have been willing to pay more for the asset than Coinbase customers. Earlier previously day, the indicator had even plunged to a low of around -106, which suggests the coin was briefly trading at a premium of $106 on Binance. From the graph, it’s apparent that this buying push on the exchange had coincided with the beginning of the latest leg up for BTC.

Binance is a platform that’s utilized by investors all over the world, while Coinbase heavily caters to US-based holders, especially the big institutional entities. As such, the Coinbase Premium Gap could be checked out as a mirrored image of how the American whales differ in behavior from the worldwide investors.

In much of 2024, Bitcoin has closely followed this indicator, suggesting that the US-based institutional investors have been the first drivers available in the market. The newest trend, nonetheless, has clearly diverged from this pattern, because it seems the buying from the Binance users is what has been inducing the uptrend.

The quant notes that this trend doesn’t mean that demand from American entities has reduced. “Over the past two weeks, demand for U.S. Bitcoin spot ETFs has surged, with a net inflow of roughly 47,000 Bitcoin,” explains the analyst.

Many of the spot ETFs use Coinbase as their custodian, so movements related to those funds can find yourself having an impact on the Coinbase Premium Gap. But because the metric has remained negative whatever the recent inflows, it seems demand from the Binance whales has simply been outweighing the US demand.