Bitcoin’s Premium Index Turns Negative

The Bitcoin Coinbase Premium Index recently dipped into the negative as the price of Bitcoin (BTC) fell below $104,000, coinciding with its RSI reaching the lowest point observed since April, suggesting a possible onset of recovery.

Key Points:

• The Bitcoin Coinbase Premium shifted to red as BTC’s price decreased to $103,500, stirring a significant shift in market perception.
• Bitcoin’s RSI settling at its April low hints at potential bottoming conditions.
• The 200-day exponential moving average (EMA) continues to play a crucial role as the coin risks short-term capitulation.

Market Update Source: X

Earlier in the week, Bitcoin attempted to secure support around the $110,000 mark, buoyed by consistent demand from US investors, witnessing its premium peak at 0.18, its highest since March 2024. However, as BTC failed to maintain above this level, confidence began to wane with its hourly premium turning negative while maintaining a positive daily reading, thus indicating that long-term buying interest from the US remains but is under pressure.

In addition, a surge in Bitcoin’s taker sell volume exceeded $4 billion, which indicated a substantial wave of selling orders in the market. This occurred simultaneously with BTC’s rejection near the short-term holder realized price of $112,370, a significant resistance level, typically indicating average cost for recent buyers. A sustained fall below this price could intensify short-term capitulation towards $100,000.

Realized Price Source: X

Bitcoin’s Current Market Movement

Currently, BTC’s trading pattern mirrors the behaviors seen at the bottom range from March to April, hinting towards a potential retracement without decisively breaking above the bullish setup unless a firm downturn beneath that level is observed.

The RSI has also dropped to echo lows from April, with a reading of 34 before a recovery phase began. The technical signal to monitor is the 200-day EMA, which BTC has sustained for almost six months. In preceding cycles, a similar trend persisted from October 2024 to March 2024, hinting that should BTC continue to mirror this trend, consolidation may follow, possibly lasting several weeks. An extended recovery may emerge by late November or early December based on past patterns.

In echoing this assessment, crypto trader Dentoshi stated on X,

“$BTC has consistently bottomed around the 3-day 100 EMA this bull run—but it’s taken 45–96 days to do so.”

Chart Analysis Source: Dentoshi/X

This article does not provide investment advice. Investors are encouraged to conduct their own research prior to making any financial action.