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26 Feb 17:02
Why is Bitcoin $86K in Nigeria? Here's why the BTC premium is huge in some countries

Since the start of 2021, the price of Bitcoin (BTC) has been chasing new highs on a weekly and daily basis. On Feb. 21, BTC reached a new all-time high of $58,300. However, an interesting phenomenon is that even with many global cryptocurrency exchanges in existence, BTC's price can still vary greatly depending on geography.

This raises an intriguing question: How can Bitcoin simultaneously trade at $53,047 in Malaysia, $49,727 in Singapore, $51,133 in India and over $86,000 in Nigeria? Is the reason simply a temporary imbalance between buyers and sellers, taxes, or regulations? Or is there something else at play?

As shown in the chart below, there really isn't a set price for BTC, as nearly every country has its own digital asset valuation.

At any given time, cryptocurrency prices will differ between countries, even after adjusting the currency rate. Indeed, some additional buying or selling pressure could create discrepancies, but that should not be continuous and steady.

What's causing the huge BTC price discrepancies?

This phenomenon isn't something new or exclusive to cryptocurrencies, however. Exxon Mobil stocks, for example, are traded in United States, Russian, Argentine, German, Mexican and Swizz markets.

While there may be different reasons for the friction, including bureaucracy and nation-specific laws, they're basically the same asset. Nevertheless, their prices usually differ after adjusting for currency exchange rates.

Unlike stocks, however, transferring cryptocurrencies usually takes less than an hour, and it doesn't depend on custodians and depositary receipt administrators. Therefore, bureaucracy can not be the reason for the big price differences for Bitcoin, which is borderless.

On the other hand, suppose one just bought BTC in the U.S. or Europe and is willing to sell it in Argentina to profit from the 6.5% difference. Even if there were no trading fees involved, the result would be the local currency, the Argentine peso.

Things get more complicated though, as one will need to convert this fiat money back to dollars or euros. There might be domestic restrictions, taxes or, even worse, a different currency rate for foreigners. Moreover, traditional currency remittances don't take place on weekends and usually take one or two business days.

Not surprisingly, the countries with the highest BTC valuations consistently score low on investment and financial freedom global rankings. Barriers and taxes created by strict government controls translate into additional risks and costs for the fiat conversion and remittance. This all contributes to the premium seen versus the remaining countries.

Government action might create extreme situations

Extreme capital control situations such as the Central Bank of Nigeria recently shutting down all cryptocurrency-related bank accounts could be behind the current 70% premium versus global BTC markets. But Nigeria likely has the highest premium in the world because the country, in particular, is also the leader when it comes to Bitcoin adoption, based on the latest data.

#Bitcoin Price is now $80,000 in Nigeria - a 60% premium.

That’s what happens when you try to ban something people want.
— Bitcoin Archive (@BTC_Archive) February 18, 2021

Eventually, arbitrage traders will find a solution to bypass sanctions, and the price gap should tighten. But right now, there is no effective way to "profit" from the arbitrage.

For those wondering what would cause Bitcoin to trade below most liquid markets such as the U.S., there is no definitive answer. It is most likely some regulatory hurdle for depositing fiat money on local exchanges, thus creating an imbalance favoring the sell-side.

The negative premium is less common, however, and stablecoins could be used to mitigate this effect. Meanwhile, when a hefty premium is seen in local fiat currency, it does not justify a similar price gap for dollar-denominated stablecoin trading.

Thus, such differences in pricing across various countries represent the risks, red tape, taxes and inefficiencies of converting fiat between currencies and sending fiat money across borders.

25 Feb 14:02
What’s Next For Dogecoin

What started out as seemingly a joke, turned into a billion-dollar project, that is fueled by rocket emojis, Shiba Inu images, and Elon Musk in some cases. Twitter is obviously one of the most influential platforms ever, as recently, when Elon Musk tweeted about Dogecoin, its value rose up by 359% in four weeks. So, what’s next for Dogecoin?

The cryptocurrency industry can be quite odd at times, and the Dogecoin is a representation of something truly unique, an exclusive club of sorts, something that a lot of people didn’t think would matter, but is constantly on the top charts of many cryptocurrency exchanges, so how did all of this happen?

Before we can dive deep into the answers to these specific questions, we first need to take a trip, back to the past, where we can see how this “memecoin” was invented, and hopefully get a grasp of what exactly is happening within its own little ecosystem.

Origins of The Dogecoin

A long time ago, on planet earth, a product manager at the Australian office of Adobe Inc. known as Jackson Palmer created Dogecoin as a satire coin that delved into the world of cryptocurrencies.

He had this unique yet comedic aspect to him, especially his tweets, but after getting some really solid feedback on social media platforms, he actually purchased the domain name, and that’s where this story starts.

Now, we move the story to Portland, where a software developer known as Billy Markus, who at the time was a software developer at IBM, wanted to make a digital currency.

As destiny foretold, Markus reached out to Palmer to get permission to build the software that would power the Dogecoin.

Now if you want to get a little bit more in-depth, the Dogecoin code is based on Luckycoin, which is derived from Litecoin. It was used as a randomized reward for block mining, and it was changed to a static reward in March of 2014. Dogecoin uses Litecoin’s scrypt technology and is a proof-of-work coin.

Scrypt is a password-based key derivation function that was created by Colin Percival and was for the Tarsnap online backup service. The algorithm was designed with the intention of making it costly to perform large-scale custom hardware attacks, where they required a large amount of memory to efficiently execute.

Proof-of-work describes a system that requires a non-insignificant, but feasible amount of effort in order to deter frivolous or malicious uses of the computing power. The concept was adapted to money by Hal Finney in 2004.

Moving on to December the 6th of 2013, this is the time where Palmer as well as Markus decided to fully launch the coin. Now, and notice this, two weeks later on December the 19th, the value jumped by 300%.

On the Flipside

  • Dogecoin marketed itself as a fun and satirical version of Bitcoin with a Shibu Inu
  • Dogecoin is an inflationary coin.
  • In January of 2014, the Dogecoin community managed to donate 27 million Dogecoins, which were worth $30.000 at the time, to fully fund the Jamaican bobsled team’s trip to the Sochi Winter Olympic Games.
  • In March of 2014, the Dogecoin community also donated $11.000 of Dogecoin to build a well in Kenya, and $55.000 more to sponsor a NASCAR driver known as Josh Wise.

How Reddit Helped

Now, imagine that we are in 2013, and Dogecoin explodes on Reddit, bringing in a market value of $8 million. This is mostly due to the fact that it became popular for giving tips, which was a way for repaying people on the internet for performing good deeds, and this included sharing ideas as an example.

Now, the important thing we need to look at here is the mentality most of the Dogecoin users had, as it was not used by people who took it seriously, and people did not buy it with the hopes of becoming rich one day through it as they did with Bitcoin for example.

Dogecoin and the Crypto Bubble

The value of Dogecoin significantly increased with the rest of the cryptocurrencies throughout the bubble at the end of 2017, and it fell throughout 2018. At its original height, Dogecoin traded for $0.018 and had a market cap of $2,000,000,000.

At the time of writing, Dogecoin is trading for $0.056 and has a market cap of $7,305,760,023.

Dogecoin Explained

Now, Dogecoin or DOGE, is based on the popular “doge” Internet meme that features a Shiba Inu on its logo. It is also an open-source digital currency and was forked from Litecoin.

Dogecoin differs from Bitcoin’s proof-of-work protocol, and it uses Scrypt technology. This altcoin has a block time of 1 minute, and the total supply is uncapped. This means that there is no limit to the number of Dogecoin that can be mined. And you can also mine Dogecoin on your own, or by joining a mining pool. Any doge miner can mine it on Windows, Linux, or Mac, and through the usage of a GPU.

Now, Dogecoin has primarily been used as a tipping system on Reddit and Twitter, and this was in order to reward the creation or sharing of high-quality content on the platforms. You can get tipped in Dogecoin through participation in a community that uses digital currency, or you can get it from a Dogecoin Faucet.

The Dogecoin Faucet is a website that gives you smaller amounts of Dogecoin at no charge as an introduction to the currency, and you can begin interacting with the Dogecoin community this way as a beginner.

Dogecoin and its Media Attention

Dogecoin was developed and meant to be used on social media. This meme-based coin saw a surge in value all the way back in 2018 as a number of media outlets began to pick it up, due to the fact that they shared stories about it having a market cap passing $2 billion.

Dogecoin got even more media attention in early 2021 due to the Wallstreetbets GameStop development.

Now, due to all of this, a lot of people are optimistic about the value of Dogecoin.

It is a popular currency discussed among celebrities, including Elon Musk, Lil Yachty, Snoop Dog, and many more.

As such, the story around the internet goes that Dogecoin has the potential of getting to $1 towards the end of 2021. The main reason as to why this might happen is due to the fact that it has quite a large community that seemingly grows on an everyday basis. Now, keep in mind that any prediction is entirely based on an ideal trading environment, and cryptocurrencies are constantly suffering from news all the time, however, Dogecoin is looking optimistic.

— Elon Musk (@elonmusk) February 24, 2021

“To The Moon” is a Reddit community effort to sky-rocket the value of Dogecoin. The forum SatoshiStreetbets has featured scores of users calling for a dogecoin rally throughout the past week, and for seemingly hours, the page was flooded by memes as well as images of Shiba Inu dogs. One user even called for a by-in at 9 p.m. and others called on investors in Europe as well as India to help prop up the virtual currency during US night hours.

Now, while the Dogecoin is a “memecoin”, or in other words, it came out as a joke, due to the truly exceptional community backing it, and they love it seems to be getting from supporters across the entire globe, it is one of those coins that are worth paying attention to, no matter who you are in this industry.

To answer the final question, what’s next for Dogecoin, well, It’s going to the moon! If you haven’t gotten it by now, this is an ironic coin, and its future lies within the fact that it will be used for tipping, sharing memes, and generally embraced by celebrities as a cool joke that actually holds some value attached to it, something nobody expected, and especially not the two founders of the coin itself.

While we can predict the coin’s value to go up to $1 over the years, at the end of the day this is a coin made for entertainment purposes, and as the heat around it dies down, the value will drop, up until the point where another celebrity will joke about it, or the Reddit community comes together to bring its value astronomically high overnight.

Like all other cryptocurrencies, Dogecoin is characterized by high price volatility, which means that its value soars, then drops seemingly overnight, and it is not a stable investment for the time being to say the least.

23 Feb 11:02
Bitcoin prints biggest hourly candle in history after BTC rebounds strongly to $54K

Bitcoin (BTC) fell below $50,000 on Feb. 22 as a correction gathered pace at Wall Street's opening to deliver 20% daily losses prior to a strong response from the bulls.

Bitcoin loses $6,000 in minutes

Data from Cointelegraph Markets and TradingView shows BTC/USD falling heavily during Monday trading, hitting lows of $47,400.

After reversing at all-time highs of $58,312 on Sunday, Bitcoin fell almost $7,000 in under an hour, sparking intense volatility, which continued at the time of writing.

"Almost a $7,000 hourly candle. That has to be by far the largest hourly move in history," analyst Scott Melker reacted.

Earlier, Cointelegraph Markets analyst Michaël van de Poppe highlighted the area between $50,500 and $52,000 as being crucial to hold in order to preserve the chances of the bull run continuing in the short term.

In fresh analysis on Monday, he noted that historically, this time of year is not when crypto markets put in their strongest performance.

At the time of publishing, Bitcoin had recovered to trade back above $53,000.

Buyers line up to steal sub-$50,000 Bitcoin

According to reports on Twitter, the action accompanied fresh criticism of Bitcoin from U.S. Treasury Secretary Janet Yellen, who reportedly referred to it as "inefficient" while repeating claims that it is used in criminal activity.

In a curious coincidence, Sunayna Tutejahe, a Bitcoin proponent and well-known financial innovator, became the new chief innovation officer at the Federal Reserve.

"OUCH! #Bitcoin plunges >10% on worries prices are excessive. Elon Musk tweeted on Saturday that prices 'seem high,'" markets commentator Holger Zschaepitz tweeted, quoting a headline from Bloomberg that focused on off-the-cuff remarks from Musk last week.

“The selloff across the board this week is a result of some of last week’s exuberance easing, as well as a much needed unwinding of over-leveraged long positions,” Ross Middleton, co-founder of exchange DeversiFi, added to Reuters.

For those familiar with Bitcoin and crypto markets in general, meanwhile, even the precipitous drop was just business as usual.

"After a while, you become immune to these price drops. Only makes you stack even harder," popular Twitter account Armin van Bitcoin responded.

Contributor Joseph Young further pointed to the so-called Coinbase premium returning to positive almost immediately once the $47,400 bottom reversed, reaching an eye-watering $500 — a bullish sign. Melker, in turn, emphasized the amount of buying volume that the dip had unleashed.

21 Feb 11:02
Blockchain tech will bridge the gap between DApps and enterprises

Blockchain technology is revolutionizing the way we interact, transact and share information, with many experts predicting it will be the most disruptive technology in the next decade. After little structural innovation since the 19th and 20th centuries, decentralization has brought industries such as finance, media and technology closer to transparency, freedom from intermediaries and heightened efficiency.

Traditional enterprises rely on a centralized closed-door structure. In contrast, decentralized finance projects are being built with the ethos that governance should be decentralized and democratic. Transitioning society to decentralized platforms can make many services safer, more accessible and more transparent than ever before. The increasing interest in the space speaks to a collective desire to have more control over critical elements of our lives, especially our finances.

While decentralization helps to solve issues like transparency and efficiency, the lack of a trusted central authority means that decentralized applications, or DApps, must rely on third parties to supply data to execute transactions or application functionalities such as taking out a loan. Access to reliable, trusted information such as price feeds, real-world events and identification, among many others, underpins the reliability, strength and efficiency of a decentralized application.

The security to protect this data comes from an oracle solution that is able to reliably and effectively connect real-world and off-chain information with decentralized applications and smart contracts in a verifiable, manipulation-resistant manner. With more than 1 million regular users of DApps globally, there is a huge demand for reliable data external to the blockchain because it underpins the security of DeFi applications and the billions currently locked in the space.

Following hacks, attacks and data manipulation, the challenge facing blockchain technology is creating trust and building secure systems in the absence of established enterprises or government regulations. This is where new technologies like data oracles are essential to create a secure link between traditional companies with reliable price feeds and the decentralized ecosystem.

Connecting the old and the new

Data oracles act as the bridge between decentralized blockchain applications by aggregating and connecting real-world data to smart contracts. These decentralized applications then use smart contracts that self-execute when certain criteria are met, such as liquidating collateral, which requires a price oracle. In the absence of a centralized authority, data oracles are essential to connect blockchain-based applications with the information required to execute these smart contracts.

The use cases for smart contracts and oracle technology are extensive and span across insurance, real estate, healthcare and, most importantly, the DeFi space, where a security breach could put millions at stake.

In DeFi, instances of hacks are plentiful. Data oracles are the input to the logics of smart contracts and therefore dictate their behavior: the output. If the data oracle input is incorrect, this leads to unintended behavior from the smart contract and can result in losses of funds or other undesired outcomes, as seen even in the strongest DeFi projects. These structural problems make widespread adoption of data oracles essential.

There is a desperate, critical need to connect Web 2.0 to Web 3.0, to create a more resilient, efficient, censorship-resistant internet. Traditional companies built on Web 2.0 are not yet structurally ready to make the transition into DeFi due to the learning curve, know-how and organizational flexibility required. These traditional enterprises will require seamless onboarding processes with a high level of flexibility and customizability to act as a bridge to Web 3.0.

This is where novel oracle technology will come in, providing the support and systems for enterprises to make the leap into Web 3.0 without the businesses themselves having to grapple with the process.

While DeFi has undeniably boomed over the past year, the space still requires broader adoption by the majority, who have no coding expertise, as it is this accessibility that will create a truly robust DeFi ecosystem.

Traditional enterprises also stand to benefit greatly from this transition, as their data is a valuable resource to decentralized applications and an innovative new revenue stream ripe for market capture as the industry continues rising.

Why we must incentivize traditional enterprises to the blockchain

Many decentralized applications require real-time information such as price feeds, sporting results, weather and news updates to function. Traditional enterprises that can supply reliable real-world data must take advantage of this growing demand by connecting with decentralized applications and commercializing this data through a reliable data oracle. Tech and media giants like Google and Bloomberg, for example, would benefit hugely from the use of a data oracle.

This is an exciting step for the industry, as when large enterprises dip their toes into DeFi, it adds extra security and legitimacy to the space. In turn, this transition will create an additional source of income for these established businesses in a new, thriving industry. Traditional enterprises have no choice but to enter the space or risk being left behind as the world continues to adopt DeFi, DApps and smart contracts.

Connecting directly with data sources is the best way for companies to ensure the security and integrity of their data — which simultaneously strengthens the overall security in the DeFi space and the entire decentralized ecosystem. Oracles play a very important role in this process and in building trust in the DeFi and wider blockchain industry.

The future is decentralized

We are already seeing many large enterprises incorporating decentralized technologies into their business models. It is up to the leaders in the DeFi space to engage and guide these traditional businesses for there to be significant change and evolution. It is imperative that the industry prioritizes usability, simplification and community education to experience the widespread adoption DeFi is gunning for. The future is decentralized, and there is so much room for the industry to grow — we are only at the beginning of the revolution.

20 Feb 11:02
Bitcoin’s market cap flipped Tencent on its way to $1 Trillion

At approximately $1 trillion, Bitcoin’s market cap has blown past Tencent, which holds a valuation of roughly $917.8 billion at time of publication, according to AssetDash rankings.

Crypto’s largest digital asset is now sixth on AssetDash's list of top market cap companies across the globe. Google, officially known by its parent entity, Alphabet (GOOGL), holds the fifth spot with a market cap of approximately $1.4 trillion at time of publication.

"After reaching a new all-time high price mark, bitcoin surpassed Chinese tech giant Tencent, moving it up to the #6 spot in the world among publicly traded companies," CoinSmart co-founder and CEO, Justin Hartzman, told Cointelegraph, adding:

"This is a strong indicator of the increased value, trust and adoption of bitcoin and the cryptocurrencies industry. Many analysts are saying this is the year bitcoin will surpass $100k and I don’t think that speculation is too far off.”

In October, Bitcoin surpassed PayPal, taking the 21st position on the leaderboard with a market cap just shy of $240 billion. The coin has grown substantially since then. Bitcoin has broken past Tencent in market cap rank before, although market caps have changed since then. At time of publication, BTC ranks above Tencent, Tesla and Facebook.

Crypto's pioneering asset has enjoyed a significant rally since falling to $3,600 in March 2020 during a pandemic-related crash. The coin's run picked up speed in the latter half of 2020, during which a number of mainstream financial entities announced their Bitcoin purchases. One of the more notable entrants has been MicroStrategy, whose CEO, Michael Saylor, has advocated significantly for Bitcoin.

19 Feb 09:02
Elon Musk says bitcoin is slightly better than holding cash

Tesla (NASDAQ:TSLA) Inc CEO Elon Musk on Thursday said that owning bitcoin was only a little better than holding conventional cash, but that the slight difference made it a better asset to hold.

"However, when fiat currency has negative real interest, only a fool wouldn't look elsewhere," Musk said in a tweet. "Bitcoin is almost as bs as fiat money. The key word is 'almost'."

He also defended Tesla's action to invest in bitcoin, saying that the difference with cash made it "adventurous enough" for the S&P 500 company to hold the cryptocurrency.

Tesla's $1.5 billion bitcoin purchase set the cryptocurrency soaring toward this week's record peak above $50,000 while Musk's recent promotion of dogecoin on Twitter also lifted the price of that cryptocurrency.

18 Feb 11:02
Nigeria and South East Asia led global crypto adoption in 2020

Data published by statistics firm Statista has revealed Nigeria is the leading country per capita for Bitcoin and cryptocurrency adoption, with nearly one in three survey respondents indicating they used or owned crypto assets in 2020.

According to the survey, the pre-existing prevalence of mobile phone based peer-to-peer payments has led many Nigerians to explore cryptocurrency. Statista noted that many Nigeria responded they had recently installed crypto payment applications on their devices.

The findings also note that many Nigerians are exploring crypto assets for international remittances.

Adoption in the country shows no signs of slowing, with demand for crypto assets booming among Africa’s largest population despite the Central Bank of Nigeria enacting a ban on banks providing financial services to crypto exchanges in the past fortnight. On Feb. 17, Cointelegraph reported that BTC was trading at a 36% premium in Nigeria.

According to Google Trends, Nigeria also dominates search traffic for the keyword “Bitcoin”.

Crypto adoption is also strengthening in South-East Asia, with 21% of Vietnamese and 20% of Filipino participants responding they had used crypto last year. As in Nigeria, Statista attributes much of the Vietnamese and Filipino demand for crypto to remittances.

Notably, Vietnam ranks second by adoption despite its central bank refusing to recognize crypto assets as a legitimate means of payment. In May 2020, Vietnam’s government established a research group tasked with developing and scrutinizing policy proposals concerning digital currencies, suggesting the nation may soften its stance at some point in the future.

Turkey and Peru were found to be the third and fourth-ranked nations for adoption, with 16% of respondents from each country directly engaging with crypto last year. Switzerland ranks fifth with 11%.

The findings were based on Statista’s Global Consumer Survey, which queried respondents based in 74 countries.

Despite its highly permissive crypto regulations, Japanese respondents ranked as the lowest worldwide for digital asset adoption — tying with Denmark with just 4%.

17 Feb 14:02
Bitcoin Surpasses $51.7K As Analyst Declares Parabolic Advance

It appears to be all systems go for bitcoin as the bulls aim to cement $50,000 as support and set up the ‘new normal’ for BTC/USD. On February 17, 2021, bitcoin hit new highs of over $51,650 as it encountered what Peter Brandt confirms is a “parabolic advance.”

Bitcoin has now entered the uncharted $50,000 zone with data from TradingView showing bitcoin passing the $50K resistance zone again. This time around it continued into uncharted territory. On February 16, bitcoin flirted with $50,000 for the first time in its history. But, the level failed to hold more than just minutes.

With this return above this zone, the biggest crypto is in a ‘parabolic advance’ which is the fourth in its 12-year history, analysts explained. Brandt tweeted alongside an annotated price chart:

“Big picture $BTC Bitcoin is undergoing its third parabolic advance in the past decade. A parabolic advance on an arithmetic scale is extremely rare – three on a log scale is historic.”

While responding to the post, Kraken growth lead Dan Held said that putting into context its initial phase before 2012, there have been four parabolic advances. Brandt said that if the advance is compromised, a correction of 80% is most likely a bearish consequence. That behavior was seen in 2018 after Bitcoin surged to nearly $20,000 and then bottomed out at $3,100 around one year later.

Is This A New Normal?

According to previous reports, several indicators somehow suggest that bitcoin is far from violating any form of this uptrend, being at the start, instead of the end of its bull run. Blockstream CSO Samson Mow declared:

“$50,000 #Bitcoin is the new normal.”

While discussing the new highs, the others noted that macro factors may converge to develop a chain reaction of adoption that may push BTC further into price discovery. One popular Twitter account Documenting Bitcoin added:

“If you think $50,000 a bitcoin is expensive, wait until you hear that the government is about to print $1,900,000,000,000 out of thin air.”

In the meantime, data shows that bitcoin has taken the momentum out of altcoin growth with its moves in the past several days, with all of the top-10 cryptos except Polkadot (DOT) experiencing sideways price action.

16 Feb 15:02
Bitcoin vaults above $50,000 for first time ever

Bitcoin rose above $50,000 on Tuesday to a new record high, building on a rally fuelled by signs that the world's biggest cryptocurrency is gaining acceptance amongst mainstream investors.

Bitcoin hit a new high of $50,602, and was last up 5% at $50,300. It has risen around 72% so far this year, with most of the gains coming after electric carmaker Tesla (NASDAQ:TSLA) said it had bought $1.5 billion in bitcoin.

It also said it would accept the currency as payment.

But Tesla was only the latest in a string of large investments that have vaulted bitcoin from the fringes of finance to company balance sheets and Wall Street dealing desks, as U.S. firms and traditional money managers have started to buy a lot of it.

"The recent market conditions and events both in the crypto space and the financial world at large put such a price movement within the realm of possibility," said Jacob Skaaning of crypto hedge fund ARK36.

"However, I'd like to offer a word of caution: while my long-term outlook is bullish, massive price fluctuations along the way are only to be expected. Bitcoin is still extremely volatile."

Smaller cryptocurrency ethereum edged 1.1% higher, just shy of its record high price of $1,874.98.

15 Feb 10:02
Bitcoin's Coinbase premium turned negative. Here's what it means for BTC price

Bitcoin’s (BTC) definitive breakout above $50,000 may have to wait longer to materialize as spot buying pressure on Coinbase Pro shows signs of weakening — at least, in the short term.

The Coinbase Premium Index, which measures the gap between the BTC price on Coinbase Pro and Binance, has flipped negative, according to CryptoQuant. In other words, selling pressure on Coinbase appears to be strengthening compared with other exchanges like Binance.

A negative reading on the Coinbase Premium Index could be a precursor to short-term resistance. On the other hand, when the premium is high, it indicates strong spot buying pressure on Coinbase.

Based on the index, CryptoQuant CEO Ki Young Ju believes topping $50,000 “looks pretty tough” in the near term.

“Current buying power doesn’t come from Coinbase,” he added. “No more Coinbase premium compared to Binance/Huobi/OKEx. Be careful.”

Coinbase has become a major bellwether for Bitcoin demand due to its popularity among large, institutional buyers. These market participants acquire their BTC via over-the-counter markets on Coinbase Pro. Although these large purchases don’t immediately impact the BTC price, they signify growing demand for the digital asset and, in turn, diminishing supply. The Coinbase Premium Index, therefore, is one way to gauge institutional demand for BTC in the short term.

A short-term fluctuation in the Coinbase premium doesn’t appear to have any bearing on Bitcoin’s long-term trajectory. The digital asset remains in a strong uptrend, having peaked well north of $49,700 on Sunday, according to TradingView data.

The Bitcoin price has gained a whopping 28% over the past week, thanks in large part to Tesla’s planned acquisition of the asset. Based on the electric vehicle maker’s most recent 10K filing with the United States Securities and Exchange Commission, it plans to allocate roughly 7.7% of its gross cash position to Bitcoin.

Publicly-traded companies and fund managers hold roughly 6% of Bitcoin’s circulating supply — a figure that doesn’t include Tesla’s $1.5 billion position.