Bitcoin Price Decline Amid Coinbase Premium Surge

U.Today reports that Bitcoin's price has fallen sharply, impacted by a wave of selling in the crypto market. However, there is a notable development: the Coinbase (NASDAQ:COIN) Premium has surged.

CryptoQuant highlighted this contrast in a recent tweet, stating, "Bitcoin plummets, but Coinbase Premium surges."

Understanding Coinbase Premium

The Coinbase Premium measures the percentage difference between Bitcoin prices on Coinbase Pro and Binance. A higher premium indicates increased buying demand from U.S. investors. Coinbase is renowned for being a favored spot exchange among U.S. institutional investors.

Recently, the Coinbase Premium showed negative values, but it has rebounded significantly after a price drop. Typically, when the premium is negative, market recoveries tend to follow. This suggests that during panic-selling on Binance, which caters to smaller investors, U.S. institutional investors may exhibit aggressive buying behavior.

Crypto Market Faces Sell-off

The overall crypto market experienced a downturn, escalating on Tuesday and resulting in significant losses across the sector. Bitcoin (BTC) dipped to a low of $94,220 as prices fell dramatically.

On December 5, Bitcoin reached a peak of $104,000 on Coinbase but has struggled to maintain that level. Over the last 24 hours, the total cryptocurrency market has lost more than $200 billion.

Major tokens and midcap cryptocurrencies faced one of their worst trading days in recent months, particularly during early Tuesday sessions.

Data from CoinGlass reveals that over $1.6 billion in cryptocurrency positions were liquidated within the last 24 hours, indicating a broad unwinding of leveraged positions. The overall market value decreased by 3.73%, currently sitting at $3.47 trillion.

As of now, Bitcoin is trading at $97,689, down 0.76% in the last 24 hours. Other major coins, like Ethereum and Dogecoin, have struggled to maintain momentum. This decline resulted in the liquidation of over $1.39 billion in long positions, marking the largest liquidation amount since 2021.

This article was originally published on U.Today.