Ethereum Coinbase Premium Gap Drops Post-Bitcoin ETF Approval
Ethereum Coinbase Premium Gap Drops Following Spot ETFs Approval
Since the approval of the Bitcoin Spot ETFs, the Ethereum Coinbase Premium Gap has decreased. Despite the decrease in volatility, the coin’s price remained susceptible to fluctuations.
What is the Ethereum Coinbase Premium Gap?
The Ethereum Coinbase Premium Gap is an indicator that tracks the difference between the price of Ethereum (ETH) on Coinbase and Binance. If this indicator returns a positive value and rises, it means that the coin is trading at a premium on Coinbase. Conversely, if it decreases, it means that the coin is trading at a significantly lower price on Coinbase than on Binance, mostly due to a change in sentiment or buying pressure among US investors.
The Impact of Bitcoin Spot ETFs
Since the introduction of the Bitcoin Spot Exchange Traded Fund (ETF) on January 10, the Ethereum Coinbase Premium Gap has shrunk according to data from CryptoQuant. At press time, the Ethereum Coinbase Premium Gap was -1.53, a decrease of over 450% since the launch of the BTC ETF.
The Situation on Asian Markets
An evaluation of the Asian markets revealed that the Ethereum Korean Premium Gap, which measures the price difference between South Korean exchanges and other exchanges, remained positive after the BTC ETFs became tradable. When it rises, it indicates strong buying pressure among Korean retail investors. At the time of publication, the Ethereum Korean Premium Gap was 3.32, according to data from CryptoQuant.
Is Price Volatility Ahead?
Coinbase is the second largest cryptocurrency exchange by volume. Therefore, the ongoing decline of the Ethereum Premium Gap on the exchange is noteworthy. Because a persistent discrepancy between exchange prices could increase Ethereum’s market volatility.
An evaluation of the coin’s Bollinger Bands (BB) indicator on a daily chart showed a steady widening of the gap between the upper and lower bands of this indicator. When this gap widens, it signals that an asset’s price is deviating more from its average.
However, at the same time, Ethereum’s Average True Range (ATR) and Chaikin Volatility, which are also markers for market volatility, have been trending downwards. At the time of publication, Ethereum’s ATR was 102.20, a decrease of 18% since January 12. Similarly, the coin’s Chaikin Volatility has dropped by over 150% since then.
Although Ethereum’s BB indicator points to potential price fluctuations, the declining ATR and Chaikin Volatility suggest that the trend has become less volatile. It remains to be seen how these developments will impact the market.
Sources: CryptoQuant, TradingView
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