Bitcoin Dips Below $93,000: Analyzing the Causes Behind the Plunge

Bitcoin has recently plummeted below the $93,000 mark. Let's explore the trends and indicators that may have contributed to this downturn.

Bitcoin Coinbase Premium Gap Has Gone Cold

As highlighted by CryptoQuant community analyst Maartunn in a recent post, the Coinbase Premium Gap has returned to neutral levels. This gap tracks the price difference between Bitcoin on Coinbase (USD pair) and Binance (USDT pair).

When the Coinbase Premium Gap is positive, it indicates that US-based whales are buying more than Binance users, leading to higher prices on Coinbase. Conversely, a negative gap suggests greater buying pressure on Binance.

The chart shows that the Bitcoin Coinbase Premium Gap had been at notable positive levels but has recently declined to neutral. According to Maartunn, the previous premium was driven by Microstrategy's significant purchase of $5.4 billion worth of Bitcoin. With this buying pressure diminished, Bitcoin has retraced to below $93,000.

Close Relationship with BTC Price

The correlation between BTC and the Coinbase Premium Gap has been significant throughout 2024. Monitoring this metric will be crucial, as a further decline could indicate bearish trends for Bitcoin's price.

In other updates, the Bitcoin Active Addresses indicator has seen a sharp increase, suggesting heightened transaction activity on the network.

The 14-day simple moving average (SMA) of Active Addresses has reached its highest level in eleven months, indicating substantial network activity. However, despite this surge, the recent price drop indicates that this interest is not necessarily linked to buying.

Current BTC Price

As of now, Bitcoin is trading at approximately $92,400, reflecting a nearly 6% decline in the last 24 hours.