CriptoQuant Analyst Darkfost stated that the price of bitcoin by institutions and professional investors had not eased in the near future, but had accelerated. A direct signal is that the Coinbase premium index has not returned to the positive range since May 15, and has been close to 40 days.

The Coinbase premium continues to be negative.

This indicator is used to compare the price differentials of Bitcoin on Binance and Coinbase Advanced. Because Coinbase Advanced is more often used by professional and institutional investors, and Binance has a higher retail trade, and if the BTC price on Coinbase continues to be lower than Binance, it usually means that the big financial mood is more cautious and the sales are heavier.

Darkfost argues that this trend reflects the fact that the current market environment is still not conducive to risk assets. Bitcoin, while maintaining a dynamic trade, has little willingness to take over from large funds, and institutional pressure continues.

PPE data higher than expected

This is also reinforced by the latest United States PCI. Data shows that:

  • Overall PCE ratio 4.1 per cent, higher than expected 4.0 per cent
  • Core PCE ratio 3.4%, higher than expected 3.3%
  • Both data are high since April 2023.

According to analysts, the re-emergence of inflation has made it more difficult for the market to bet on a short-term shift to easing. In the case of risk assets such as bitcoin, interest rate improvements are expected to suppress valuation and risk preferences.

Darkfost also mentioned that the conflict between Iran and the United States could be one of the factors driving inflation. Ground-based tensions that continue to push up energy and risk-averse demand may further weaken market expectations of interest rates.

Strong, GDP, compressed interest rate reduction space.

In addition to inflation, US GDP figures are higher than expected. Darkfost points out that 2.1 per cent of the increase indicates that economic resilience remains, which exposes the Fed to more complex policy trade-offs.

On the one hand, there was no significant economic slowdown; on the other, inflation remained above target. Under such a combination, the Fed lacks a reason to reduce interest rates as quickly as possible, with the subsequent weakening of market expectations for short-term easing and the possibility of further tightening.

Against this background, the risk-averse sentiment of large investors has still not receded. Coinbase's premium is at a negative level for a long time and is therefore considered to be a market signal that the institutional pressure has not yet ended.