According to the index, the buying pressure on $BTC is mounting up as the Coinbase platform surged above $1 trillion. The institutional investors are reported to be behind the rapidly building force.
Institutional Investors Caused The Premium Index To Surge
The Coinbase premium index is a special metric for measuring gaps between BTC/USDT and BTC/USD trading pairs on Binance and Coinbase respectively. It is positive when buying pressure on Coinbase is more than selling pressure and vice versa.
The CryproQuant CEO, Ki Young Ju, tweeted that the index showed significant growth in Bitcoin buying pressure. He said it has moved from a negative mark to a positive 0.075 level.
Young Ju stated that it first attempted a positive move towards recovery in April and this was the second attempt. The CryptoQuant head continued that the source of the buying force that is building on Coinbase might be institutional investors.
He had earlier pointed out in June that most American-based institutional investors trade on Coinbase. During that time, the index was negatively depicting that investors’ sentiments were low. Interestingly, the index chose now when the general market is still wallowing in a bloodbath to grow positive.
Bearish Market Affected Many Crypto Networks Severely
Bitcoin recently showed a sign of recovery as it traded above $22k briefly, straight up from last month’s $18.5k low. Bitcoin network reckoned that it lost 58% of its all-time high price in Q2 of 2022.
It dropped from $45,524 to about $18500 in 3 months. This made Q2 when Bitcoin had its worst quarterly performance in about ten years.
While crypto prices continue to dive, many firms in the industry that have high leverage status were exposed. For instance, both sister coins, LUNA and UST, collapsed and took out billions from the industry in May.
Shortly after, the Celsius network started its battle with insolvency created by the bearish market condition. This forced the crypto lending network to halt withdrawals on its platform to save it from crashing.
Following Celsius’s case, other crypto lending firms who were in the same condition also froze their customer’s accounts. Furthermore, Three Arrows Capital, a prominent crypto hedge fund, plunged into liquidation after losing a court case against it.
It was sued by users who claimed it is incapable of repaying debt, forcing the court to rule it out. Many crypto firms who gave the hedge fund loans suffer the brunt the most.
Unfavorably, the continuous crypto market decline has forced some firms like Coinbase and BlockFi to lay off some workers. Bankman-Fried recently executed Alameda research that aimed to help crypto lenders like BlockFi and Voyager Digital to stay buoyant.