Selling pressure on the popular cryptocurrency exchange Coinbase has eased as the well-known Coinbase premium, which tracks the price difference of Bitcoin on Coinbase and other exchanges, has significantly narrowed.
The “Coinbase Premium Gap,” as on-chain analysis firm CryptoQuant shows, has narrowed after dipping into significantly negative territory this week, suggesting significant selling pressure on the exchange that is known to be used by institutional investors entering the cryptocurrency space.
The narrowing of the gap indicates that selling pressure has eased, likely as flows to spot Bitcoin exchange-traded funds (ETFs) started stabilizing and as the price of the flagship cryptocurrency started surging.
According to popular analyst Maartunn, who shared a chart of the Coinbase Premium Gap on the microblogging platform X (formerly known as Twitter), the gap’s drop could “create some short-term upside opportunity.”
However, the analyst also noted there has been a sharp rise in Bitcoin’s open interest, which indicates the total number of outstanding derivatives contracts, increased by 9% in “just a few hours” in a move the analyst said “doesn’t look healthy.”
These changes came as the price of the flaghip cryptocurrency Bitcoin seemingly started breaking out of a range it has been holding onto for over a month, surpassing the $65,000 mark to now trade above $66,000 after rising more than 8% over the last 24-hour period.
Notably, the cryptocurrency rose after inflation data in the United States revealed consumer prices rose 3.4% year-over-year in April, compared to a 3.5% rise in March.
Recent filings with the U.S. Securities and Exchange Commission have been revealing hedge funds and Wall Street giants added exposure to Bitcoin via spot Bitcoin exchange-traded funds in the first quarter of the year, with Bracebridge Capital, a Boston-based hedge fund managing roughly $12 billion in assets, buying up $360 million over three funds.
The disclosure comes amid several others, with the U.S. state of Wisconsin recently becoming the first local government entity to reveal an investment in Bitcoin after purchasing 94,562 shares of BlackRock’s iShares Bitcoin Trust (IBIT), worth nearly $100 million, in the first quarter of the year.
The move sees the state of Wisconsin join several Wall Street giants, including JPMorgan Chase and Wells Fargo, in revealing BTC exposure through investment in spot Bitcoin exchange-traded funds, according to 13F filings.
JPMorgan revealed an investment of $731,246 in BlackRock’s IBIT ETF, Bitwise’s BITB, Fidelity’s FBTC, and Grayscale’s GBTC, while Wells Fargo disclosed $141,817 in GBTC holdings. BNP Paribas and BNY Mellon have also made similar disclosures.
BNP Paribas, the second-largest bank in Europe whose asset management arm has over $600 billion in assets under management, has gained exposure to the flagship cryptocurrency Bitcoin in the first quarter of the year as well by purchasing shares of IBIT.
Featured image via Unsplash.
