One volume suggested that the reason for the recent negative Coinbase premium could be due to Tesla selling bitcoin.
Tesla May Have Lost 75% of Its Bitcoin Holdings Behind the Negative Coinbase Premium Gap
As explained by one analyst in a Cryptoquant post, news of Tesla selling 75% of its BTC stash is on the back of the recent negative premium gap on Coinbase.
The “Coinbase Premium Gap” is an indicator that measures the price difference between bitcoin listings on the crypto exchanges Coinbase and Binance.
Since Coinbase is popularly used by US investors (especially large institutions) while Binance has a more global user base, this indicator can tell us about the buying or selling behavior of US-based holders.
When the value of the metric is negative, it means that BTC listed on Coinbase is currently worth less than Binance. This suggests that there is some selling going on by US investors.
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On the other hand, a premium gap value greater than zero means that an instant buy is taking place on Coinbase.
Now, here is a chart that shows the trend in the bitcoin Coinbase Premium gap over the past few months:
The value of the metric seems to have been red during the past couple of months | Source: CryptoQuant
As you can see in the above graph, the bitcoin coinbase premium gap has been negative for some time, apart from a brief spike for green values.
Quantity notes that this was an indication that there were frequent heavy selling from high net worth investors or institutions based in the US.
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The latest news about Tesla dumping 75% of its total BTC holdings makes it clear that the source of the sale was Elon Musk’s company.
Furthermore, as seen in the chart, the Coinbase premium gap has corrected in recent days as the selling pressure from Tesla eased.
btc price
At the time of writing, bitcoin price is floating around $22.6k, up 15% over the past seven days. In the past month, the value of crypto has risen by 10%.
The chart below shows the coin’s price trend over the past five days.
Looks like the value of the crypto has shown some decline over the last 24 hours | Source: BTCUSD on TradingView
A few days ago, bitcoin was seeing some sharp uptrends, but the coin has tumbled in the past as a reaction to the news about Tesla’s dump.
Featured image from Shubham Dhage on Unsplash.com, charts from TradingView.com, CryptoQuant.com