Large cryptocurrency investors are making comeback on market, according to Coinbase Premium Index
Coinbase Premium can be used to determine the feeling among US institutional and retail traders, as it reflects the discount or premium on the Coinbase Pro trading platform primarily used by large crypto investors.
During the crypto crash, the metric showed one of the strongest dips in its history, suggesting that market makers on Coinbase were struggling to find enough liquidity on the market, which caused a large discount.
Since Coinbase Pro is primarily used by large investors, their average order size is significantly larger than the average order you see on a centralized exchange. To avoid unlikely volatility in the market, market makers inject more liquidity into the market before executing an order.
The metric’s recovery is a direct sign of returning buying power on the market and whales’ accumulation. With the rise of the buy volume on the market, traders and investors are pushing the premium higher.
We are already seeing the effect of the return of buying volume to the market, as Bitcoin has finally broken through the consolidation channel that has been forming since June 19th. Unfortunately, BTC pulled back after hitting the $22,000 price range.
Bitcoin feels relief
One of the main sources of selling pressure on the first cryptocurrency could be gone from the market as the largest cryptocurrency miners announced that they have successfully realized most of the funds they used for stabilizing their operations.
Another source of pressure is the rally in the US dollar which is removing almost all financial assets from cryptocurrencies and traditional markets.
At press time, Bitcoin is moving in the $21,000-$22,000 trading range and changing hands at $21,788.
