By Marcus Sotiriou, Analyst at the publicly traded digital asset broker Global Block
Bitcoin remains around $22,000 as it hovers around a critical region. For the rally to continue, bulls want to see the price hold above $21,500, which is the 20-day moving average. Since Bitcoin’s fall from $45,000, this moving average has had 6 retests and 6 rejections, so $21,500 is a must-see price level. If the price fails to retest and break the daily trend after a 60% decline in 4 months, that would be a telltale sign of market weakness.
There are some signs that we may have a continuation of the upside as the Coinbase Premium Gap has reached positive values over the past week. The Coinbase Premium Gap is an indicator that measures the difference between the price of Bitcoin on Coinbase and the price on Binance.
This indicator was negative for several months during the downtrend of the market, showing that the value of Bitcoin on Coinbase has been lower than that of Binance. However, data from Crypto Quant shows that recently the Coinbase Premium Gap has increased significantly. This could be a sign that US investors are buying more Bitcoin than the rest of the world, as Coinbase is primarily used by US investors.
It could also infer that institutions are becoming more aggressive buyers, as Coinbase has a larger percentage of institutional users compared to Binance – institutional buying pressure is always a positive sign for bulls.
The fact that this indicator has risen, while bad news no longer has a negative impact on the market, could be a sign that we could see a further rise in the coming weeks.