According to analysis by CryptoQuant, Coinbase’s Bitcoin premium turned positive for the first time since December 17, 2024, suggesting that Bitcoin demand is rising among U.S. investors.
Additionally, analysts noted that Bitcoin’s recent recovery above $100,000 was helped by reduced selling pressure from miners and improved profitability for miners.
Coinbase Premium Index (CPI) turns positive
CryptoQuant's analysis shows that the Coinbase Premium Index has turned positive for the first time since mid-December 2024, marking the recovery of demand from U.S. investors. "Since the U.S. approved a spot-based Bitcoin ETF, the behavior of U.S. investors has become a leading indicator for the crypto market," said Burak Kesmeci, an analyst at CryptoQuant. "The data shows that the behavior of U.S. investors has once again turned to the dominance of buying pressure."
Kesmech noted that Coinbase’s positive premium suggests increased buying interest, especially from institutional investors trading in large blocks. “At the same time as the CPI turned positive, a one-time block outflow of 4,012 bitcoins was recorded from Coinbase at 18:04 local time on Monday,” the analyst mentioned.
Tightening liquidity and miner behavior support Bitcoin's upward trend
Analysts at Bitfinex noted that a number of indicators suggest that the downward pressure that pushed Bitcoin to a local low of $91,000 in late December may be easing.
“Bitcoin sell-side liquidity is shrinking fast,” the analysts said, noting that the Liquidity Inventory Ratio (LIR) — a measure of how long it will take for current supply to meet demand — has plummeted from 41 months in October to 6.6 months now. This sharp drop in liquidity mirrors trends seen during the strong rebound in the first and second quarters of 2024, indicating that supply is tightening as demand grows.
Analysts also highlighted changes in miner activity, which is crucial to Bitcoin’s spot market. After the 2024 halving event, when miner rewards are halved, many miners have to sell reserves to raise capital for operations and equipment upgrades. However, Bitfinex said that this selling pressure is waning as 2025 approaches.
“The flow of Bitcoin from miners to exchanges is declining rapidly,” the analysts said, suggesting that miners are increasingly preferring to hold Bitcoin rather than sell it.
Miner profitability rises but remains below pre-halving levels
In addition, a report from JPMorgan cited by CoinDesk showed that Bitcoin miners’ profitability rose for the second consecutive month in December 2024, reaching its highest level since April 2024. However, despite the improvement, miners’ daily revenue and gross profit margins are still 43% and 52% lower than pre-halving levels, respectively.
According to (CoinDesk), JPMorgan Chase estimates that Bitcoin miners' daily block reward revenue averaged $57,100 per EH/s in December, a 10% increase from November.
The report states that the Bitcoin network’s hash rate grew by 6% in December, reaching an average of 779 EH/s. However, this rate of growth is much slower than the 103% growth observed in 2023.
