The Rise of Coinbase Premium Index Boosts Bitcoin to $98,000 – Is a Recovery Imminent?
Bitcoin (BTC) made a remarkable surge towards $98,000 on Friday, January 3rd, owing to a resurgence in U.S. market demand, as indicated by the Coinbase Premium Index. Recent data revealed a significant uptick in the index, which had previously hit a yearly low due to cautious behavior from U.S. investors, both retail and institutional, over the holiday period.
Furthermore, the index successfully crossed above the crucial 14-day Simple Moving Average (SMA) after nearly a month, suggesting a stronger influence of U.S. buyers in the market, as pointed out by CryptoQuant expert Burak Kesmeci.
“When the Coinbase Premium Index surpasses the SMA14, indicating the dominance of Bitcoin buyers, it signals early signs of U.S.-based buyers reclaiming control in the market.”
Bitcoin ETFs Witness $908 Million Inflows Daily
A similar trend was observed in the U.S. Bitcoin ETF market, with a collective daily net inflow of $908 million on Friday, marking a notable monthly peak.
Even BlackRock’s IBIT, which had seen outflows at the beginning of the year, saw a positive inflow of $253 million on the same day. Fidelity’s FBTC led the pack with $357 million, closely followed by Ark Invest’s ARKB with $222 million inflows, indicating a resurgence in institutional interest that propelled Bitcoin’s climb to $98,900.
The ongoing recovery was also stimulated by a quest for liquidity, with a significant cluster of short positions found near the $98,000 level earlier, while the upside liquidity shifted towards the range of $99,000 to $100,000. Conversely, lower liquidity zones (highlighted as bright yellow areas) were spotted around $97,200, $96,000, and $95,000.
With liquidity seemingly concentrated on the lower end of the price spectrum currently, a potential dip towards the $97,000 to $95,000 range cannot be dismissed.
Conversely, the liquidation heatmap analysis hinted at a probable price consolidation for Bitcoin within the $96,000 to $100,000 range in the near future.
Although the scenario remains uncertain, the strengthening demand for BTC ETFs might act as a catalyst for a bullish breakout above the $100,000 mark.