Coinbase Premium Index Nears Record Lows Amid End-of-Year Bitcoin Slump
As 2024 came to an end, the Coinbase premium index, which measures the retail demand for Bitcoin in the US, dropped to its lowest point in a year, and an analyst cautioned that this could make a short-term price rebound difficult.
The increasing seller pressure in the US market has significantly impacted the Coinbase Premium Index, dragging it to new lows,
CryptoQuant contributor Burakkesmeci
It dropped as low as -0.23 on December 31. Bitcoin temporarily fell below $91,479 that same day, the lowest level since November 27. Burakkesmeci ascribed this to a market with minimal liquidity at the conclusion of the year. The premium last hit this level in January 2024, about the same time as spot Bitcoin ETFs were introduced in the United States. When Bitcoin was trading at about $68,165, according to CoinMarketCap, it approached -0.20 in late October, right before the US elections, and it nearly reached this range once more.
Trump Inauguration Sparks Speculation on Bitcoin’s Next Bull Run
The inauguration of US President-elect Donald Trump on January 20 is a significant macroeconomic event that the cryptocurrency industry is closely monitoring. After an early halt, several analysts predict that Bitcoin’s climb will eventually continue after the inauguration. The price of bitcoin may drop by up to 30% before continuing its upward trajectory, according to Bitget Research head analyst Ryan Lee.
On the other hand, long-term Bitcoin holders are currently sitting on substantial earnings. Since investors might try to cash out and take their gains into the new year, this might raise the possibility of additional sell-offs. For short-term holders, however, the average cost basis is much greater.
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