Why Bitcoin’s Latest Breakout Attempt Could Fail on a US Demand Problem
Bitcoin's breakout attempt may fail due to fading US institutional demand, indicated by bearish divergence and a drop in Coinbase premium.Summary
Bitcoin is attempting to break out again towards the $79,510 level, but several on-chain signals suggest this attempt could fail. A bearish divergence is forming, where Bitcoin's price is making higher highs while its momentum indicator (RSI) is showing lower highs, often preceding a trend reversal. Additionally, the Coinbase Premium Index, a proxy for US demand, has dropped significantly even as the price has risen, mirroring a pattern that led to a pullback on April 17. Historically, a decline in this premium indicates that US buyers are withdrawing, and the price tends to follow. Furthermore, the fuel for a short squeeze, which can drive prices up without strong buyer demand, is diminishing. Open interest has decreased, and the funding rate for perpetual futures is much less negative than before, meaning there are fewer shorts to be squeezed. If Bitcoin fails to decisively close above $79,510, a pullback is likely, with key support levels at $76,074 and $70,512.
(Source：BeInCrypto)