Soaring Bitcoin demand on Coinbase, but here's the catch for the traders!
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At press time, the Long/Short Ratio for Bitcoin stands at 51%, according to CoinGlass, suggesting upside momentum for the cryptocurrency. This ratio, which measures the balance of long and short positions, indicates that more investors are betting on Bitcoin's price to rise.
One factor contributing to this trend is the rising Coinbase Premium Gap. This gap, which measures the difference in Bitcoin prices between Coinbase and Binance, can rise due to increased buying pressure by U.S. investors, relative market activity, and positive market sentiment. When the Coinbase Premium Gap widens, it often suggests that U.S. investors are driving up Bitcoin prices.
On August 15, the Coinbase Premium Gap reached 88.7, indicating strong U.S. spot demand. This demand could last longer, according to the figures from CryptoQuant, suggesting that bullish pressure may persist.
However, it's important to note that leveraged long positions carry the risk of sudden liquidations. If these positions are heavily built up, a sudden pullback could be triggered if squeezed.
Retail traders are also accumulating long futures positions, mirroring the trend set by institutional investors. While retail-driven futures activity can be volatile, institutional spot demand tends to have a longer-lasting impact on price.
The alignment of institutional and retail demand can offer the market a stronger base, potentially pushing Bitcoin closer to new all-time highs. The Long/Short Ratio at press time is 51%, indicating that the dominance of long positions suggests Bitcoin's projected rally could extend further.
When the Coinbase premium gap jumps, buyers pay above the broader market price. This premium reflects increased conviction from larger players in the Bitcoin market. The Long/Short Ratio is a useful indicator for understanding market sentiment and potential price movements in Bitcoin.
In other news, TeraWulf, a company specialising in Bitcoin mining, has announced a shift from Bitcoin to AI. With a $3.7B Google-backed deal, TeraWulf aims to combine cryptocurrency and AI technologies, marking an interesting development in both industries.
[1] https://www.binance.com/en/blog/industry-report/coinbase-premium-explained-how-us-investors-impact-bitcoin-prices/ [2] https://www.investopedia.com/terms/c/coinbase-premium.asp [3] https://www.coindesk.com/markets/2021/05/24/coinbase-premium-gap-suggests-strong-us-demand-for-bitcoin/ [4] https://www.coindesk.com/markets/2021/05/18/coinbase-premium-gap-suggests-strong-us-demand-for-bitcoin/ [5] https://www.coindesk.com/markets/2021/08/17/coinbase-premium-gap-signals-heavier-us-spot-demand-from-institutions/
- The rising Long/Short Ratio for Bitcoin, currently at 51%, indicates that more investors are betting on its price to rise, fueling optimism in the crypto finance world.
- The widening Coinbase Premium Gap, recently reaching 88.7, signifies increased buying pressure by U.S. investors, which could sustain the bullish market momentum for Bitcoin.
- The alignment of institutional and retail demand, as seen in long futures positions, could offer the market a stronger base, potentially pushing Bitcoin closer to new all-time highs.
- TeraWulf's shift from Bitcoin mining to AI, with a $3.7B Google-backed deal, represents an intriguing intersection of cryptocurrency and technology industries, signifying a rapidly evolving market landscape.
