Coinbase Premium Index recently moved from negative to positive territory, signaling an increase in institutional demand for BTC from the US, coinciding with a rise in BTC prices.
Rise in Institutional Interest
Over the past week, the index shifted from -0.024 to a high of 0.013, coinciding with a price increase in Bitcoin reaching $102,000. Historically, a positive Coinbase Premium Index indicates that BTC is selling at a higher price on Coinbase compared to other exchanges, which suggests stronger buying interest from US-based investors.
Risk Index Analysis for BTC
Further analysis shows that the Risk Index suggested heightened risk as BTC neared $100K in early January. Subsequently, the Index sharply declined and stabilized around the value of 11.95, while BTC prices hovered between $97.2K and $98.5K.
Inverse Correlation with US Dollar Index
The relationship between Bitcoin and the US Dollar Index (DXY) often highlights inverse correlations, where Bitcoin’s value rises as the dollar weakens, and vice versa. However, recent data suggests a shift. Despite the DXY climbing from 104 to 110, BTC also surged from under $70K to over $110K.
The current stabilization of BTC price alongside a declining Risk Index offers a cautiously optimistic outlook for investors. However, shifts in the Risk Index and a return to correlation with DXY might affect future BTC price movements.
