Is Bitcoin at risk as Coinbase premium hits monthly low?

Bitcoin’s Coinbase premium has fallen to its lowest level this month, adding to signs that institutional investors in the U.S. have continued selling the flagship crypto while spot demand weakens.

According to data shared by CryptoQuant analyst Darkfost, the Coinbase premium dropped to -0.0983% on May 21 after staying mostly negative since late April, indicating that Bitcoin (BTC) has been trading at a discount on Coinbase compared to Binance. 

Because Coinbase is widely used by U.S. institutions, hedge funds, and spot ETF participants, the metric is often used to track institutional appetite in the American market.

Darkfost said the recent move shows “institutional selling pressure has intensified recently,” adding that professional traders on Coinbase Advanced appear to be “selling more aggressively than investors trading on Binance.”

A negative Coinbase premium usually signals that large American market participants are offloading Bitcoin faster than global retail traders. Binance, by comparison, tends to attract a larger share of international retail activity. 

When Bitcoin trades lower on Coinbase than on Binance, analysts generally interpret the imbalance as localized selling pressure from institutions rather than broad retail panic.

Over the past seven days, the premium has moved deeper into negative territory at a faster pace, coinciding with a pullback across Bitcoin and weak demand indicators tied to U.S. markets.

Weak spot demand adds pressure

Elsewhere in the market, analysts have linked the declining premium to institutions repositioning capital amid macroeconomic uncertainty and improving performance in traditional equities.

CryptoQuant analyst Axel Adler said the latest readings show “zero confirmation from US spot demand,” suggesting that institutions are not currently supporting Bitcoin’s price recovery through aggressive buying activity.

At the same time, large investors appear to be moving toward equities instead of defensive assets. Gold prices have fallen 5.8% over the past month, while the S&P 500 and Dow Jones Industrial Average have continued climbing since early April.

According to Darkfost, uncertainty around the macro environment appears to be pushing institutions toward hedging strategies as they wait for clearer economic signals.

However, crypto analyst Myles G Investments said this could be a sign of a market bottom. See below.

Signs of weaker institutional participation have also appeared in exchange-traded fund flows. Data from CoinGlass shows U.S. spot Bitcoin ETFs have recorded four consecutive trading days of outflows since May 14, totaling roughly $1.3 billion.

Analysts at Bitfinex noted that Bitcoin’s open interest has dropped by roughly $1.5 billion this week, wiping out much of the leverage that had built up during Bitcoin’s rally toward $82,000.

“With short-side fuel exhausted and long positioning reset lower, the next major move likely depends on spot demand,” Bitfinex said.

Bitcoin has fallen 4.5% over the past week and briefly slipped to just above $76,000 on Tuesday, its lowest level this month. At the time of writing, the asset was trading near $77,532, over 38% below its all-time high.