With the recent market declines, many institutions in the field have started to experience liquidity problems. Many projects, from hedge funds to exchanges, are trying to tackle these liquidity issues. The latest news on this issue came from a stock market that is among the world’s largest cryptocurrency exchanges. Accordingly, Coinbase has decided to stop selling Bitcoin due to heavy sales. We have compiled the details for you.
Coinbase decides to stop Bitcoin sales
According to the latest news, the world-famous cryptocurrency exchange Coinbase has stopped selling Bitcoin (BTC). The event came after the data revealed by the Coinbase Premium Index. For those who don’t know, the Coinbase Premium Index is used to compare the price of BTC on Coinbase PRO with its price on other exchanges. Thus, the difference between the exchanges, which occurs in the BTC price, is determined and steps are taken accordingly. In fact, the premium or discount in the index indicates whether institutional investors are actively selling or buying the spot asset. Therefore, the index acts as a direct indicator for market sentiment.
An analyst from CryptoQuant recently revealed striking results. Accordingly, market makers at Coinbase could not meet the demands of their customers. Thus, it turned out that Coinbase did not have enough liquidity. The lack of liquidity has caused market makers to actively sell Bitcoin through trading bots. The main reason behind the increase in the discount was actually related to the Bitcoin price. As we reported as Kriptokoin.com, BTC experienced a big drop in the market of 40%. This decline resulted in a devaluation of 40%.
Institutional investors started buying BTC
After all, the index reveals that currently institutional investors are no longer actively selling their holdings. Instead, investors started buying spot BTC in relatively large volumes. Events as a result pushed the Coinbase Premium Index into premium territory. The indicator turned positive for the first time since April 2022, when cryptocurrency market sales began. The index is quite significant as it indicates an impending leap in the cryptocurrency market. As it is known, indicators such as fund flow, MVRV scores and four-year trends revealed that Bitcoin was ready to rise.
Accordingly, every indicator in the market shows the rise time of Bitcoin. However, entries in the market are quite low. Therefore, it is not currently possible for us to see a big rise in Bitcoin or an altcoin. According to the volume indicator, trading volumes on many crypto exchanges are moving even below the year average. As a result, traders and investors cannot push cryptocurrencies in either direction.
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