Bitcoin’s recent price fluctuations are gradually sparking bearish sentiment around its price trajectory among crypto enthusiasts and investors. However, given the positive developments around Coinbase PremiumThe crypto asset could be gearing up for a potential breakthrough in the near term, sparking hope within the community.
Coinbase Premium Indicates Short-Term Rally for Bitcoin
In light of declining market conditions, Coinbase Premium, a key indicator of investor sentiment, is currently showing positive trends, fueling the potential for a near-term rally for Bitcoin, according to data from the on-chain analytics platform, CryptoQuant.
Coinbase Premium measures the price differences of BTC on the Coinbase platform and other cryptocurrency exchanges. When there is a positive reading, it usually shows that the institution investors in the United States are putting significant buying pressure on the digital asset.
In the quick post, the expert known as Yonsei Dent says a rally could be on the horizon for Bitcoin following an analysis of the Coinbase Premium Index over a 1-hour time frame to observe short-term momentum using the 24-hour and weekly moving averages.
Using this indication in tandem with historical BTC price movements, Dent highlighted that when a golden cross forms, the crypto asset often experiences brief price increases. Indeed, historically, there have been notable price swings right after the moving average over a one-day period crossed a golden cross by decisively crossing the weekly moving average.
At the same time, the index has momentarily exceeded the weekly moving average again, and the difference between the weekly and daily average is steadily narrowing, suggesting a possible price rise in the near future.
He further highlighted renewed upward pressure as the reason for a persistent rise in demand among US investors despite the price correction seen on Tuesday, during which BTC fell from around $66,000 to the $61,000 threshold. According to the expert, this steady increase in demand could indicate that the price of Bitcoin could be poised for a rebound in the short term.
A price drop before the rally?
Even though BTC is expected to see a rally soon, it is possible that the crypto asset could see a decline before surging once again. Market expert and enthusiast, Crypto Bullet, in a recent article on warned of a price drop to the level of $57,000.
Crypto Bullet noted that at press time, Bitcoin was trading in a price range between $59,000 and $60,000which he pointed out about 5 days ago when BTC was valued at $65,000. So he thinks the price could drop a bit to $57,000, hopefully after a brief rise. “We need to take out the September 16 low at $57,500 and I think this $57,000 drop will be the ultimate low of the month,” he added.
Featured image from Unsplash, chart from Tradingview.com
