The Coinbase Premium Index (CPI) measures the price difference between Bitcoin (BTC) on Coinbase and other major exchanges. A positive CPI indicates that BTC is trading at a premium on Coinbase, while a negative CPI indicates that BTC is trading at a discount. Recently, the CPI has fallen to its lowest level in 12 months. So, what does this mean for Bitcoin? There are a few potential reasons for the decline in the CPI. One possibility is that institutional interest in Bitcoin has waned. Institutions typically trade on large exchanges like Coinbase, so a decrease in institutional activity could lead to a lower CPI. Another possibility is that there has been an increase in sell-off pressure on Coinbase. This could be due to a number of factors, such as the recent decline in the price of Bitcoin or the end-of-year liquidity crunch. If there are more sellers than buyers on Coinbase, this will also cause the CPI to fall. The decline in the CPI is a sign that the Bitcoin market is currently in a state of uncertainty. Institutional investors are taking a cautious approach, and retail investors are selling off their Bitcoin in anticipation of further losses. Unless macroeconomic conditions improve or new investors enter the market, it is difficult to see how the price of Bitcoin can recover in the short term.

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