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Bitcoin Still In Bull Market, On-Chain Indicator Confirms

The trend in an on-chain indicator could suggest that the Bitcoin bull market is still on even after the latest volatile action in the asset’s price.

Bitcoin Coinbase Flow Pulse Is Still Signaling A Bull Market

In a new post on X, CryptoQuant author Axel Adler Jr has talked about the latest trend in the Coinbase Flow Pulse for Bitcoin. The “Coinbase Flow Pulse” here refers to an on-chain indicator that keeps track of the net amount of BTC that’s moving between Coinbase and other exchanges.

When the value of this metric is positive, it means coins are flowing from wallets associated with other exchanges to those connected to Coinbase. On the other hand, the indicator being under zero implies Coinbase is going through outflows.

Now, here is the chart for the Bitcoin Coinbase Flow Pulse shared by the analyst that shows the trend in its 30-day and 90-day simple moving averages (SMAs) over the last few years:

Bitcoin Coinbase Flow Pulse

As displayed in the above graph, the 30-day SMA of the Bitcoin Coinbase Flow Pulse surged above the 90-day a few months back and has since maintained its steep climb, creating distance between the two lines.

Historically, this type of crossover has signaled a shift toward a bull market phase for Bitcoin. Clearly, BTC hasn’t seen the reverse type of crossover yet, so this signal could still be considered active.

The 30-day MA crossing above the 90-day MA implies that inflows into Coinbase are gaining momentum. The reason this acts as a bullish signal for BTC is that the platform is primarily used by institutional entities based in the US.

Whenever coins are flowing into Coinbase, it’s a sign that these American traders are interested in the cryptocurrency. As the analyst explains,

Currently, a bullish phase prevails, driven by strong institutional interest. The absence of significant red zones indicates no large-scale outflows typically seen in a bear market when capital shifts from the spot market to futures.

While a transfer of wealth from other exchanges to Coinbase is a positive sign for Bitcoin, exchange inflows that occur from self-custodial wallets can be a bearish sign instead. Fortunately, BTC doesn’t have to worry about this for now as the BTC Exchange Reserve, a metric that measures the total amount of the asset sitting on centralized exchanges, has plunged.

Here is a chart shared by an analyst in a CryptoQuant Quicktake post that shows the latest trend in the indicator:

Bitcoin Exchange Reserve

BTC Price

Bitcoin had kicked the week off with some recovery to the $102,000 level, but the asset has since erased most of its gains as it’s now trading around $96,700.

Bitcoin Price Chart

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Bitcoin Held On Coinbase Exchange Reach 9-Year Low, Can Bitcoin Reach $75,000?

In a recent development, data from crypto analytics firm Glassnode shows that the amount of Bitcoin held on Coinbase has reached a 9-year low. This has raised the possibility of the flagship crypto rising to a new all-time high (ATH) of $75,000 soon enough. 

BTC Held On Coinbase Drops Significantly 

According to Glassnode, the Bitcoin balance on Coinbase dropped to a nine-year low of 344,856 on March 18. This suggests that Bitcoin investors are choosing to move their holdings off exchanges and hold for the long term rather than sell anytime soon. A move like this reduces the short-term pressure on Bitcoin and could spark an upward trend in BTC’s price. 

Meanwhile, the drop in BTC held on Coinbase looks to be a trend, with data from market intelligence platform Santiment showing a drop in the total amount of Bitcoin held on centralized exchanges (CEXs). This data is also supported by the fact that these exchanges have recorded more outflows than inflows lately. 

Further data from Santiment also shows that the supply on exchanges as of March 22 stood at just over 836,000 BTC compared to the 18.82 million BTC that resides out of these CEXs. The decline in the number of BTC held on exchanges is undoubtedly a welcome development, considering how the flagship crypto token has recently been plagued with a wave of profit-taking. 

Before now, the bearish sentiment surrounding BTC was further strengthened by JPMorgan’s theory that Bitcoin was overbought and that the crypto token could experience further price declines soon enough. However, with BTC back over $70,000, there is the belief that this is just the beginning of an upward trend that could see it reach new highs. 

Spot Bitcoin ETFs Record Net Inflows

BitMEX Research revealed in an X (formerly Twitter) post that the Spot Bitcoin ETFs recorded a combined net inflow of $15.7 million on March 25. This represents a positive turn of events after these funds recorded negative flows throughout last week. The wave of profit-taking by these Bitcoin ETF investors contributed to the BTC dip that occurred during that period. 

The crypto community will no doubt keep their eyes on the flows recorded by these Spot Bitcoin ETFs this week as they could give an idea of whether or not the outlook towards BTC has become bullish again. These Bitcoin ETFs now play a prominent role in the Bitcoin ecosystem, considering how much BTC these fund issuers accumulate whenever there is a high demand for them. 

At the time of writing, Bitcoin is trading at around $70,700, up over 5% in the last 24 hours according to data from CoinMarketCap.

Bitcoin price chart from Tradingview.com

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Bitcoin ETFs Boosts Coinbase (COIN) Shares As JPMorgan Upgrades Rating

The recent Bitcoin rally, propelling its price to the $52,000 level, has positively impacted the stock of US-based cryptocurrency exchange Coinbase (COIN). After experiencing a notable dip to $115 at the start of February, Coinbase’s stock rose to $172 on Thursday, following a significant upgrade by a JPMorgan analyst.

Improved Prospects For Coinbase Amid Crypto Rally

According to a Bloomberg report, JPMorgan analyst Kenneth Worthington abandoned his bearish view on Coinbase weeks after downgrading the stock. 

As Bitcoin traded higher, Coinbase shares gained as much as 7.8% following the upgrade. Worthington believes the exchange will likely benefit from the recent rally in digital asset prices, prompting him to shift his rating back to neutral.

This change in stance comes after Worthington’s January downgrade, where he predicted a potential deflation of enthusiasm for Bitcoin exchange-traded funds (ETFs). 

However, contrary to his previous forecast, Bitcoin ETFs have been successful in terms of trading measures, and the price of Bitcoin has surged beyond $52,000, reaching its highest level since 2021. In a note to clients on Thursday, Worthington explained:

Given the acceleration in recent days of flows into Bitcoin ETFs and the significant price appreciation of Bitcoin and now Ethereum, we are returning to a Neutral rating on Coinbase as we see the higher cryptocurrency prices not only sustaining but improving activity levels and Coinbase’s earnings power as we look to 1Q24.

Coinbase

Coinbase’s stock experienced an 8% dip at the beginning of the year, following an impressive 400% surge in 2023. Analyst opinions on the stock remain divided, with buy, hold, and sell recommendations being roughly evenly split. 

Worthington maintained his $80 price target on the stock ahead of the company’s earnings report, which is scheduled to be released after the market closes on Thursday.

Worthington emphasized that Coinbase’s business is closely tied to token prices, with its core revenue being transaction-based. As the value of tokens increases and trading activity gains momentum, fees based on the value traded are expected to drive higher trading volumes, ultimately contributing to improved revenue for Coinbase.

Bitcoin ETFs Witness Significant Trading Volume 

On February 14th, the trading volume of Bitcoin ETFs showcased notable figures, with Blackrock’s IBIT recording the lead with $721 million in volume. 

Grayscale’s Bitcoin Trust (GBTC) followed closely with $619 million, while Fidelity’s FBTC secured the third spot with $456 million. On the other hand, Ark Invest accumulated a volume of $169 million.

The nine ETFs’ total trading volume amounted to approximately $1.5 billion. Notably, the largest ETFs experienced higher trading volume than the previous day, with IBIT surpassing $700 million and GBTC exceeding $600 million.

Coinbase

Intriguingly, before the trading session, GBTC sent less than half of the Bitcoin it sent to Coinbase the previous day. Despite this decrease, GBTC’s total trading volume was 50% higher.

As the demand for Bitcoin continues to surge, ETFs play a crucial role in facilitating institutional and retail investors’ participation in the cryptocurrency market. The increased trading volume of Bitcoin ETFs highlights investors’ growing interest and confidence in digital assets.

Coinbase

Currently, Bitcoin is trading at $51,900 and encountering a critical resistance level at $52,000. 

Featured image from Shutterstock, chart from TradingView.com

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Coinbase Custody Head Departs As Crypto Giant Prepares For Bitcoin ETF Services

According to Bloomberg, Coinbase Global has recently experienced a change in leadership within its custody division. The departure of Aaron Schnarch, former CEO of Coinbase Custody, has been confirmed by a spokesperson, who also revealed that Schnarch was replaced by Rick Schonberg in August.

Per the report, the transition aligns with Coinbase’s efforts to offer services to applicants of spot Bitcoin (BTC) exchange-traded funds (ETFs).

Coinbase Affirms Readiness For Bitcoin ETF Approval

Rick Schonberg, who joined Coinbase in 2021, aims to provide experience to his new role, having previously worked at reputable financial institutions such as Goldman Sachs, State Street, and Tagomi, according to Bloomberg. 

Coinbase on the other hand, has emerged as the preferred choice for custodial services among Bitcoin ETF applicants, including industry giants like BlackRock, Franklin Templeton, and Grayscale Investments.

Custody services play a crucial role for potential managers of spot Bitcoin ETFs, as investors rely on these providers to securely safeguard their digital tokens.

Notably, a Coinbase spokesperson emphasized the company’s preparedness for ETF approval, stating to Bloomberg: 

We have extensively prepared for ETF approval. Our systems have been designed and tested to handle added trading volume, increased liquidity, and general increases in demand on our systems.

Coinbase Custody, operating as a trust company, falls under the regulatory oversight of the New York Department of Financial Services and undergoes auditing by Deloitte & Touche.

Countdown To Historic Decision

The race to obtain regulatory approval for the first ETF directly investing in the largest cryptocurrency, Bitcoin, is entering a critical phase. 

The US Securities and Exchange Commission (SEC) faces a deadline of January 10 to decide whether to approve a spot Bitcoin ETF application submitted by ARK Investment Management, led by Cathie Wood, and 21Shares, along with potentially other similar filings.

Overall, the departure of Aaron Schnarch and the subsequent appointment of Rick Schonberg within Coinbase Custody highlight the company’s strategy to the growing demand for custodial services from Bitcoin ETF applicants. 

With the potential approval of spot Bitcoin ETFs on the horizon, the industry eagerly awaits the SEC’s decision, which will have far-reaching implications for the adoption and mainstream acceptance of cryptocurrencies.

Coinbase

Bitcoin, the largest cryptocurrency in the market, is currently trading at $42,100, representing a 1.1% decline over the past 24 hours. 

In recent weeks, BTC’s price has been consolidating above $40,000, exhibiting sideways movement since the beginning of December. However, it has achieved a notable gain of over 11% in the last 30 days.

It remains to be seen how the price of BTC will react to the potential approval of these index funds by the largest asset managers in the world, and what other impact it will have on the overall crypto market.

Featured image from Shutterstock, chart from TradingView.com