Retail Panic Selling Meets Aggressive Institutional Buying on Coinbase

Bitcoin’s price decline, triggered by a selling spree in the crypto market, hasn’t dampened institutional interest.

CryptoQuant’s latest insights show the Coinbase Premium climbing, reflecting robust US investor activity during this volatile phase.

Coinbase Premium Jumps

The Coinbase Premium, a metric that tracks the percentage difference between Bitcoin’s price on Coinbase Pro and Binance, has surged following a sharp decline in BTC’s value. Negative Coinbase Premium values, observed as panic selling intensified on Binance – an exchange known for its higher proportion of retail investors – have historically signaled potential market rebounds.

The recent rebound in the premium essentially highlighted strong buying pressure from US institutional investors, who heavily utilize Coinbase as their preferred spot exchange.

This behavior suggests that institutional investors often capitalize on price drops by adopting aggressive buying strategies, especially when retail-driven panic selling occurs.

Bitcoin was rocked by $1.5 billion in long liquidations before finding support at the critical $95,000 level. It had since stabilized, consolidating around $97,000-$98,000, before another price slump pushed it toward $95,000. Despite this turbulence, the Bitcoin market shows signs of strength, buoyed by a streak of eight consecutive days of net inflows into spot ETFs, as noted by QCP Capital in its latest update.

Riot Platforms is also making waves, mirroring MicroStrategy’s strategy by issuing $500 million in convertible notes to acquire more Bitcoin, signaling strong institutional demand. Meanwhile, market watchers anticipate potential topside surprises, such as Microsoft shareholders voting on adding Bitcoin to its balance sheet or Amazon shareholders pushing for BTC as a reserve asset.

With macro volatility slightly easing and Asia rallying on China’s stimulus measures, QCP Capital said that the market eagerly awaits a key catalyst to drive Bitcoin toward the coveted $100,000 mark.

Consolidation Phase

Matrixport’s analysis suggests that Bitcoin is currently in a consolidation phase, as indicated by its proprietary Greed & Fear Index. Over the past year, the index identified five significant entry opportunities when scores dropped below 10%, signaling extreme market fear.

Recently, however, the index surpassed the 90% mark, entering Greed territory – traditionally a signal for investors to consider taking profits. Following the seven-month consolidation after the March intermediate peak, the index’s recent movement above 90% implies that Bitcoin is pausing for consolidation before potentially resuming its upward trajectory.