The recent BTC price drop comes with a market outflow of US capital. As a result, the Coinbase premium dipped to a one-month low as BTC slid as low as $63,000.
The BTC Coinbase premium was erased and turned into a net negative rate of -0.20. Over time, BTC has seen strong trading from Asian platforms, followed by growth during US trading hours.
Additionally, most of the institutional flow comes from US-based entities, most of which use Coinbase Prime Custody.
The BTC Coinbase premium turned to the red, indicating selling from large-scale US investors. | Source: CoinGlass.The recent price weakness, where BTC crashed from the $90,000 level, is affecting the exposure of US investors. The Coinbase price has been lagging since mid-December, but the negative premium deepened significantly during the latest downturn to the $60,000 range.
Coinbase premium is an indicator of either buying interest or selling. For months during bull markets, the indicator is in the green, as US optimism drove the BTC rally.
An ongoing period of negative Coinbase premium, as wide as $150, may signal a large-scale entity trying to sell on the US market.
If the selling originates from Coinbase Custody, the exact entity cannot be identified. However, historically, BTC has not bounced without a significant Coinbase premium. This time, the negative factor peaked on February 5, just as BTC erased more of its latest gains and returned to the 2021 local high.
The US premium was already fading for short periods in December. The recent negative factor is the lowest since January 2025, signaling weakening sentiment. BTC traded on Binance at $64,962.23, while on Coinbase, the price settled at $64,754.43.
Is BTC oversold?
The recent BTC slide was caused by a wipeout of long positions, based on expectations of a price recovery. Long liquidity is still available down to $60,000 levels, potentially causing another downturn.
Based on the relative strength index (RSI), BTC is oversold, as the metric dipped to 21.70 points. The crypto fear and greed index is down to five points, near all-time lows, as oversold conditions do not automatically trigger buying demand.
Based on selling and liquidity, BTC may be close to a market bottom. However, this cycle’s conditions are causing deeper worries about general crypto valuations. BTC is also pressured by forced selling and a capitulation across both retail and whale wallets.
The latest trading activity shows the European and US sessions are still subdued.
The US and European sessions had more subdued returns, as BTC is now driven by the Asian trading session. | Source: Sharpe.ai.Any momentum in BTC trading is driven by the Asian trading session. The ongoing weakness of US trading means BTC only has one daily window of growth, only to erase its gains quickly over the course of the day.
The Binance premium and the highly active Asian session are also indicators against the rumors of Binance’s insolvency. BTC has simply lost appeal for some of its busiest markets, and may take a while before being re-evaluated for a return.
Source: https://www.cryptopolitan.com/us-investors-abandon-btc-coinbase-premium/
