When the Coinbase premium for Bitcoin becomes negative, it has historically resulted in a decrease in the price of BTC.

Recently, the price of Bitcoin (BTC) has been experiencing sideways movement, failing to make significant gains. Meanwhile, a new analysis has highlighted a metric that could potentially impact the value of BTC in the upcoming days.

Datasets Suggest a Bearish Outlook for Bitcoin

As we transition into 2024, the price movement of BTC has been sluggish. CoinMarketCap reports a decline of over 1.7% in the past seven days for BTC. Additionally, its daily chart has consistently shown a downward trend.

As of now, Bitcoin (BTC) is being traded at a price of $42,653.65, with a market capitalization exceeding $835 billion. Moreover, there has been a decrease in the trading volume, indicating a reluctance among investors to trade the coin.

Meanwhile, an analyst and author at CryptoQuant, known as BlitzzTrading, published an analysis discussing a crucial metric related to BTC.

The analysis focused on Bitcoin's Coinbase Premium, which is an indicator that reflects the prices of cryptocurrency assets on Coinbase, a popular cryptocurrency exchange.

This index determines the prices of particular crypto assets on the Coinbase exchange by comparing them with prices on other exchanges.

The Coinbase premium for Bitcoin has recently entered the negative zone. Historically, whenever such occurrences have taken place, Bitcoin (BTC) has undergone price corrections.

As a result, AMBCrypto decided to closely examine the current state of Bitcoin (BTC) to determine if a price correction is likely to occur.

Based on our analysis of CryptoQuant's data, there was significant selling pressure on Bitcoin (BTC) as its exchange reserve continued to grow.

The aSORP (average Spent Output Profit Ratio) for Bitcoin (BTC) was in the red zone, indicating that more investors were selling BTC at a profit. This pattern typically suggests a market top.

Furthermore, despite the sluggish price action, derivatives investors showed increased buying activity in BTC. This raises the likelihood of a continuation of the existing trend.

What to Expect from Bitcoin in 2024

Considering the bearish outlook of most metrics, AMBCrypto examined BTC's liquidation levels. It was observed that following a price surge, BTC experienced significant sell-offs around the $43,800 level.

The liquidation event led to a price correction, resulting in Bitcoin (BTC) plummeting below the $43,000 mark and subsequently exhibiting sideways movement over the past seven days.

The MACD indicator for BTC indicated bearish dominance in the market. Additionally, BTC's Bollinger Bands showed that its price entered a squeeze zone, indicating a higher likelihood of a significant price surge in the upcoming days.

On the other hand, Bitcoin's Relative Strength Index (RSI) remained bullish, as it showed a slight increase from the neutral level.