The Coinbase Premium Index provided by CryptoQuant refers to the value obtained by subtracting the coin price on the Binance exchange from the coin price on the Coinbase Pro exchange. The higher the premium, the stronger the buying pressure from US investors.
There are reports that since the BTC spot ETF was approved in the US, the influence of US investors on the BTC price has increased. Therefore, it is important to look at the movements of the Coinbase exchange they mainly use.
We analyzed the short-term momentum of the Coinbase Premium Index by setting it to a 1-hour time frame and using the daily (24-hour) and weekly (168-hour) moving averages.
The results show that when the 🔴daily moving average strongly crosses above the 🔵weekly moving average, a significant price movement often follows. Specifically, a 📈golden cross, where the daily band rises above the weekly band, is typically followed by a price increase, while a 📉death cross indicates a subsequent price decline.
Although this indicator is based on trends observed from the Coinbase and Binance exchanges and may produce false signals, it could still be a useful reference for swing traders.
Written by Yonsei_dent