Coinbase Premium Index Turns Negative, Signaling Weaker US Crypto Demand

The Coinbase Premium Index, a gauge of US demand for digital assets, has turned negative. The move points to cooling US institutional demand and adds downward pressure on Bitcoin.

In a report published May 23, CryptoQuant contributor Lei Researcher wrote that the Coinbase Premium Index had recently fallen into negative territory. Bitcoin has held near the $75,000 level, but the market is now sending a risk signal, according to the report.

The Coinbase Premium Index measures the gap in Bitcoin prices between Coinbase, the US exchange, and Binance, the global exchange. The metric is generally used to reflect demand from US institutions and high-net-worth investors on Coinbase, versus global retail flows on Binance.

A negative premium means selling pressure in the US market is strong or demand is weak, Lei Researcher wrote. Earlier this year, during a strong rally, the index remained consistently in positive territory.

More recently, the premium has continued to fall even as Bitcoin traded sideways or edged higher. That is a bearish sign that the rally is losing momentum, the report added.

As of 5:08 p.m. on May 23, Bitcoin was trading at $74,501, down 3.64% from a day earlier.