Trusted editorial content reviewed by leading industry experts and experienced editors. Ad Disclosure
Bitcoin price continues to slip deep into the red as investors increasingly head down the trail of capitulation. Interestingly, an on-chain evaluation was recently conducted that appears on the underlying aspects that typically drive Bitcoin's price motion in December.
Coinbase Premium suddenly goes into the red: Why it matters
In a QuickTake post on the CryptoQuant platform, crypto education firm XWIN Research Japan reported that the Coinbase Premium Index metric recently took a pointy nosedive. For comparison, this metric measures the worth difference between Bitcoin on the Coinbase (USD) market and Bitcoin on other major global exchanges (like Binance) or the USDT market. In this manner, it reflects the buying or selling tendencies of US investors and helps derive insights into their behavior.
According to the Crypto Research Institute, the decline began around late November to early December. Since this decline coincides with an also sharp decline in the worth of Bitcoin, the apparent change in sentiment amongst investors from the US appears to be the reason behind the downward pressure earlier within the month.
Source: CryptoQuant
Interestingly, there are historical events that correspond to the above scenario. Typically, December sees weaker readings in comparison with the Premium's performance over the course of the 12 months. Values are sometimes near or below zero, “primarily on account of year-end rebalancing and tax collection from U.S. institutions and individuals,” XWIN Research points out.
However, there have been slight deviations from this recurring pattern. In 2018 and 2022, the premium experienced deep drops into negative zones because the market was under significant stress during these periods. On the opposite hand, there have been positive values for the premium in 2020 and 2023, which were positively correlated with the continuing bull market dynamics on the time.
“December 2025 appears to be unique” – Research Group
However, XWIN Research Japan emphasized that this 12 months's scenario has its own “unique twist.” What is noteworthy is that Coinbase Premium, despite starting December within the red, refused to keep up this state. Instead, the analytics platform reports that there was an almost immediate recovery, not only to neutral levels but back into positive territory.
As this sharp reversal occurred in a matter of days, it is obvious that the Bitcoin market can have seen the last strengths of the present bearish pressure. Interestingly, historical data shows that such moves because the market has experienced often precede price stabilization or perhaps a short-term recovery. So, based on history, Bitcoin price may very well be near a neighborhood low, which may very well be followed by a recovery.
Ultimately, XWIN Research points out that the stabilization or continued decline in Bitcoin price depends totally on “upcoming US capital flows, derivatives positioning and premium trends.” At press time, Bitcoin is valued at $89,321, with no significant movement for the reason that past day.
BTC is trading at $89,348 on the day by day chart | Source: BTCUSDT chart on Tradingview.com
Featured image from Flickr, chart from Tradingview
Editorial process At Bitcoinist, the main target is on providing thoroughly researched, accurate, and unbiased content. We maintain strict sourcing standards and each page is rigorously reviewed by our team of top technology experts and experienced editors. This process ensures the integrity, relevance and value of our content to our readers.
