What do you call a market that systematically ignores the headlines that usually cause it to fall? You say it’s resilient, with strong support from underlying demand.
That’s been the story for Bitcoin in recent weeks, as the cryptocurrency has held firm around $70,000 even as the war in Iran rages, oil prices rise and Fed rate cut bets evaporate. This kind of challenge screams optimism.
But wait, some key indicators are still going in the wrong direction, undermining this bullish interpretation.
The first indicator is Coinbase Premium, which measures the price difference between bitcoin on Coinbase, an exchange listed on Nasdaq, and on offshore giant Binance. Typically, a strong positive premium means that U.S. institutional investors are bidding more aggressively than their global counterparts. A strong Coinbase premium has regularly been featured during bull runs, including Bitcoin’s first run to $100,000 in late 2024.
But right now, Coinbase Premium is at its most negative level in over a month, according to data source Coinglass. In other words, BTC is trading at a discount on Coinbase, indicating relatively lower demand from US investors. The discount reappeared on March 19 and has been growing ever since.
Another key indicator – Bitcoin ETF inflows, also an indicator of institutional demand – has been disappointing of late.
The 11 U.S.-listed spot Bitcoin ETFs saw net inflows of $1.53 billion this month, ending a three-month streak of outflows, according to SoSoValue. But nearly $1.3 billion came in in the first half, with the pace having slowed considerably since then to just $195 million. Analysts have repeatedly emphasized that consistent and strong flows are essential for Bitcoin prices to gain bullish momentum.
Vikram Subburaj, CEO of India-based Giottus Exchange, put it well: “The signal here is that institutional demand has not disappeared. However, it is selective and less linear than in the strongest accumulation phases.”
At the time of writing, bitcoin has changed hands at around $70,000, according to CoinDesk data.
