For the past two months, a significant decline in bitcoin’s price was predominantly driven by U.S. investors intensifying their sales. Binance investors joining the selling spree exacerbated the losses, leading BTC to drop to a nearly $80,000 low. It's challenging to predict today if the nightmare is over, yet there are signs suggesting it could be.
U.S. Investors’ Appetite
There are certain regions we monitor periodically. For instance, at the end of last year and the first half of this year, we followed the premium of exchanges in South Korea for investor appetite. The interest there significantly waned as South Korean investors leaned heavily towards technology and AI stocks.
However, the core investor group that shouldn’t be lost is in the U.S., and Coinbase Premium illustrates this. According to Coinglass data, the Coinbase Premium Index turned definitively positive after roughly a month. We noted a few days ago that this was starting, and now that the trend has fully reversed to positivity, we can assert that U.S. investors are getting eager.
ETF demand and other shifts indicate a promising new phase where U.S. investors could become evident buyers.
Cryptocurrency Prices Could Rise
For a lasting cryptocurrency rise, @anlcnc1 has consistently mentioned this, and now Anıl is explaining how to interpret this change. The Coinbase Premium alone doesn’t indicate that everything is behind us.
“This is not a data set you can trade or buy futures with anyway. None of what I’ve shared are data sets for future trading; they are all informational. CB Premium is just an indication of trend direction because it can remain positive even when prices are falling, which is advantageous for me. This interpretation is that someone is buying while others are selling, which implies the price might return to its previous levels, which it has done many times, allowing me to make this comment. Conversely, we can say that as prices rise, it stays negative with someone selling the rises, and prices return to previous levels. So, when the premium is negative, if the price rises artificially as in the past, after the shift to positive, price drops will also be artificial, and buyers will no longer be sellers.”
The current situation suggests that while prices are stable or weakening, U.S. investors are maintaining their appetite.
“The reason for turning positive could be Strategy acquisitions, or other companies, but on the Coinbase side, the trend is now more purchase-oriented for some. We can also see this on the spot side. Since the last drop at 80K, the premium was negative, but the momentum was gradually rising, as I’ve shared occasionally. It only closed positively for one day, so patience is necessary. As I said, if continuation occurs, we will benefit, but the timing is not precise. Expecting the price to reflect directly on the data turning from negative to positive is misleading.”
Another noteworthy point by Anıl is that short-term investors’ aggressive panic selling has clearly diminished, as seen above. This could be holiday-induced or perceived as a seller exhaustion. However, if whale purchases continue in an environment where selling weakens and U.S. investors are becoming eager, it’s a hopeful sign for a potential rise.
“Aggressive selling by short-term Bitcoin holders has significantly decreased. The most intense panic sell-off came at the 80K lows, from where the price rebounded. The STH average cost is currently around 104,350. When the price approaches this region, they will have to make a critical decision. If this area isn’t permanently broken, and short-term holders continue to sell, the price will face pressure again and return down. Therefore, STH costs are crucial for understanding investor behavior through direct empathy. For instance, if the price reached your average cost, what would you do?”