The important indicator of retail market demand for Bitcoin in the U.S.—the Coinbase premium index—recently fell to its lowest level in 12 months. Analysts warn that this could pose challenges for a short-term rebound in Bitcoin prices.
CryptoQuant analyst Burakkesmeci noted in the analysis report on December 31:
The increasing selling pressure in the U.S. market has significantly impacted the Coinbase premium index, leading to a new low for this indicator.
The Coinbase premium index is intended to measure the demand for Bitcoin among U.S. retail investors. An increase in this index indicates rising buying pressure, while a negative value suggests that selling pressure is dominating the market. According to data from CryptoQuant, this index dropped to a low of -0.23 on December 31, 2024. On the same day, the price of Bitcoin briefly fell to $91,479, marking its lowest level since November 27, 2024. Burakkesmeci attributed this drop to 'insufficient market liquidity at the end of the year.' The last time this index reached this level was in January 2024, shortly after the launch of the U.S. spot Bitcoin ETF.
In addition, this index was close to this range just before the U.S. election at the end of October 2024, when the price of Bitcoin was approximately $68,165 and the premium index was -0.20.
Burakkesmeci pointed out that unless there is a shift in macroeconomic conditions or a surge in demand from institutional and retail investors, the current selling pressure suggests that a short-term rebound in Bitcoin prices may face challenges.
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