Bitcoin has once again dipped below the $100,000 mark. Meanwhile, the Coinbase Premium has reached its lowest level in seven months. This signals weak demand in the United States. However, on-chain data suggests that short-term investors might be buying the dip, looking for an opportunity amidst the uncertainty.
On Friday, Bitcoin extended its recent weakness, slipping below the $100,000 mark. The cryptocurrency could potentially retest its previous low of $98,200. This level was formed on June 23. On November 6, the Bitcoin Coinbase Premium Index, a metric that tracks the price difference between Bitcoin on Coinbase and other global exchanges like Binance, dropped to its lowest level since April 11.
A negative premium implies that Bitcoin is trading at a discount on Coinbase. This often reflects stronger selling pressure from US-based investors and ETF-related outflows. Historically, extended periods of negative premiums have coincided with short-term price weakness.
Does the Low Coinbase Premium Signal a Potential Bottom for Bitcoin?
Crypto trader Daan Trades noted that such phases are not unusual during broader downtrends. He explained that the discount tends to emerge when the market faces concentrated spot selling from Coinbase-linked flows. While not a bullish sign in itself, Daan added, “The market rarely bottoms locally without first seeing such a discount.” This suggests that a sustained price recovery following this discount could signal that the market is absorbing sell pressure, potentially marking the early stages of accumulation.
Furthermore, on-chain data further supported this mixed setup. The short-term holder (STH) net position change recently surged to a yearly high. This suggests that traders who typically hold coins for less than 155 days are adding to their positions despite the pullback. Conversely, the long-term holder (LTH) net position change approaches yearly lows. This indicates ongoing profit-taking from seasoned investors. This divergence suggests that while new buyers are stepping in, the absorption isn’t yet strong enough to establish a definitive bottom range.
From a technical standpoint, Bitcoin’s short-term charts, both the one-hour and four-hour timeframes, show no signs of a bullish reversal setup. The recent uptick in price was primarily driven by shorts covering, not genuine buying pressure. However, over the past few hours, BTC open interest has steadily risen while funding rates remained elevated.
This could signal that traders are opening new long positions. Nevertheless, unless BTC reclaims the $104,000 level as firm support, a deeper pullback toward $95,000 might take place. Potentially, a retest of the yearly open near $93,500 in the coming week. Such a move could flush out remaining longs before setting the stage for a possible rebound led by short liquidations. Overall, companies and investors are watching closely.
