Historical data shows that the price of Bitcoin could recover soon if this happens – CryptoQuant

Bitcoin has continued to experience volatility following the long-awaited halving event, with prices continuing to wobble. Despite the sideways movement, however, analysts remain bullish on bitcoin’s price action in the current market cycle.

According to an analyst at blockchain analytics platform CryptoQuant, the Coinbase Premium trend could have a positive effect on the price of bitcoin once it turns negative.

The Coinbase Premium Index is an indicator that represents the percentage difference between the BTC/USDT pair on Binance and the BTC/USD pair on Coinbase Pro. Since Binance has a global user base, while Coinbase is more focused on the US market, the difference between the prices of these two major crypto exchanges provides insight into the trading behaviors of both demographics.

Coinbase Premium index near zero

When Coinbase Premium shows a positive trend, it indicates that the price of bitcoin on Coinbase is higher than on Binance, as there is more buying pressure on the former. However, a negative trend suggests that Coinbase is seeing more selling pressure as the price listed on Binance rises.

According to CryptoQuant’s analysis, historical data indicates that the price of bitcoin usually bounces when the Coinbase Premium trend is negative and moves from a downtrend to an uptrend. One such occasion was when Grayscale won the lawsuit against the SEC regarding the conversion of its GBTC product to a spot Bitcoin ETF, positively affecting the price of BTC.

The Coinbase Premium Index is currently in the positive zone, near zero. However, if the trend changes to negative, bitcoin price is expected to rally.

“If the historical pattern repeats itself, we may have a better chance of success if we wait a little longer and invest in the rally after the trend turns negative,” the analyst said.

Accumulation continues amid price fluctuations

Bitcoin has continued to see increased investor interest despite price fluctuations. The latest approval of several spot Bitcoin ETFs has further enhanced market entries.

Earlier this month, Coinbase released its first quarter earnings report, with total revenue up 72% to $1.6 billion.

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