Convergence

2024

Bitcoin

Avocado

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A community expert from the CryptoQuant platform explained why the narrowing of Coinbase Premium might be an optimistic indicator for Bitcoin (BTC) in the long run. Previously, this metric was useful for checking the time it took the largest crypto to set a new all-time high.
<h2 id="in-2021-it-sent-btc-price-to-ath-what-coinbase-premium-dynamics-tell-us">In 2021, it sent BTC price to ATH: What Coinbase Premium dynamics tell us</h2>
Looking at the one-hour chart of <a href="https://cryptoquant.com/insights/quicktake/66e3087642286374a35e43f2-Coinbase-Premiums-Convergence-Signals-Imminent-Bitcoin-Price-Move" rel="noopener noreferrer nofollow">Coinbase Premium</a>, the analysts registeted a "triangular convergence" as both the upper and lower bounds are converging toward zero. This figure, similar to a "bullish flag" in trading, was noted by pseudonymous crypto expert Avocado Onchain, a verified analyst of the CryptoQuant community.
<blockquote>
 Coinbase Premium’s Convergence Signals“During the 2021-2022 bull market, we observed a similar triangular convergence in the Coinbase Premium during a long consolidation phase. Afterward, Bitcoin’s price surged significantly, reaching a new all-time high.” – By <a href="https://twitter.com/avocado_onchain?ref_src=twsrc%5Etfw" rel="noopener noreferrer nofollow">@avocado_onchain</a>… <a href="https://t.co/EhHWXHtvlF" rel="noopener noreferrer nofollow">pic.twitter.com/EhHWXHtvlF</a>— CryptoQuant.com (@cryptoquant_com) <a href="https://twitter.com/cryptoquant_com/status/1834493517814444330?ref_src=twsrc%5Etfw" rel="noopener noreferrer nofollow">September 13, 2024</a>
</blockquote>
As mentioned by the expert, previously, this "triangle" was registered prior to Bitcoin's (BTC) run to its all-time high in the previous bull market:
<blockquote>
 During the 2021-2022 bull market, we observed a similar triangular convergence in the Coinbase Premium during a long consolidation phase. Afterward, Bitcoin’s price surged significantly, reaching a new all-time high. I believe that the current triangular pattern in the Coinbase Premium reflects a standoff among large investors (whales), as they cautiously gauge each other’s moves before the next major price shift.
</blockquote>
Coinbase Bitcoin Premium Index, i.e., the delta (percent difference) between the Coinbase Pro price (BTC/USD pair) and the Binance price (BTC/USDT pair), is tracked by researchers as an indicator of American investors' activity and interest in purchasing Bitcoin (BTC) at current prices.
The lowering of Coinbase Premium signals that the market found equilibrium between buyers and sellers, which is always an indicator of an imminent volatility spike.
<h2 id="bitcoin-btc-volatility-decreasing-amid-market-apathy">Bitcoin (BTC) volatility decreasing amid market apathy</h2>
As covered by U.Today previously, Bitcoin (BTC) Coinbase Premium dumped in Q2, 2024, below the -0.3 level twice, indicating deep pessimism among U.S. buyers.
Meanwhile, the volatility of the Bitcoin (BTC) price is also decreasing. As per TradingView <a href="https://www.tradingview.com/symbols/BVOL24H/" rel="noopener noreferrer nofollow">charts</a>, in just three days, Bitcoin's 24-hour volatility dropped from 3.05% to 2.3%.
Bitcoin (BTC), the largest cryptocurrency, is trading at $57,758, up by 0.1% in the last 24 hours. Amid pale performance, its trading volume drcreased by 15% overnight.

Coinbase Premium Sends Super-Rare Bullish Signal for BTC

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