Since Bitcoin’s price began to drop after its recent surge to a new all-time high on December 17, several key metrics have been demonstrating bearish movement, sparking uncertainty about BTC’s prospects in the short term. A persistent decline in crucial metrics might lead to a larger drop in BTC’s price to previous support levels.
Bitcoin’s ongoing price pullback has been followed by a persistent downward trajectory of the BTC’s Coinbase Premium Index. Technical analyst and host of the Crypto Banter show Kyle Doops reported the negative development on the X (formerly Twitter) platform, reflecting a reduced buying appetite from investors on the US-based crypto exchange.
This indicator, which calculates how much Bitcoin costs on Coinbase compared to other international exchanges, is frequently used to assess institutional interest. The consistent downtrend comes as market optimism wanes and is indicative of a possible change in investors’ behavior due to price fluctuations.
According to the expert, Bitcoin’s Coinbase Premium Index spiked during Donald Trump’s victory in the US Presidential elections held in early November. Kyle Doops highlighted that this increase helped to fuel BTC’s price above the $100,000 milestone.
However, since December 7, this key metric has been sliding alongside the digital asset’s recent drop below the $94,000 level. Other factors, such as holiday slowdowns and liquidity struggles, appear to be affecting the market, which could lead to an extended decline in BTC’s price in the short term.
While these conditions signal a bearish outlook, Kyle Doops is still confident about Bitcoin’s larger outlook, stating, “It is not over yet.” Thus far, crypto enthusiasts are keeping a close eye on this trend for indications of a wider impact on its price movement in the coming weeks.
This development coincides with Bitcoin witnessing a substantial inflow into cryptocurrency exchanges, signaling rising market activity and investors’ engagement. Specifically, a large movement of BTC to crypto exchanges implies a potential selling strategy by investors, causing a negative outlook for the digital asset.
The significant inflow may be crucial in shaping BTC’s price dynamics in the short term. With waning prices coinciding with exchange inflow, speculations and uncertainty have developed within the community about BTC’s next price move.
Bitcoin may have seen notable volatility, but Kyle Doops has identified a drop in BTC held at a loss, reflecting growing market sentiment. Kyle Doops reported that the amount of bitcoin held at a loss has decreased to about 3 million BTC, down from 3.9 million to 6.1 million during last year’s corrections.
Due to this, investors are demonstrating resiliency and the market is becoming less pressured. Considering the development, the market expert suggests a stronger and healthier outlook for the flagship asset.
Featured image from Unsplash, chart from Tradingview.com
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