Bitcoin Coinbase premium drops as U.S. traders cut exposure

Bitcoin’s Coinbase Premium Index turned negative for the first time since mid-September after US-based investors retreated markets against the backdrop of China trade tensions. The largest cryptocurrency by market cap dropped in price from $111,000 on Thursday evening to as low as $103,000 at press time.

Data from CoinGlass shows that the Bitcoin Coinbase Premium Index, which measures the price difference between BTC traded on the US-focused exchange Coinbase and global platforms, dipped below zero early Friday morning. 

Throughout early October, Bitcoin had experienced consistent buying from institutional and retail US investors. The premium had ticked upwards to 0.18 last Wednesday when prices closed in on $110,000, its highest point since March 2024. 

The upward momentum faltered when Bitcoin failed to hold above that level on Thursday, taking leveraged positions through an influx of sell orders. The benchmark crypto fell as low as $103,500 on Friday morning before stabilizing near $106,700 by 9 AM UTC. 

US tariffs scares away Bitcoin investors

The sudden weakness in the Coinbase Bitcoin’s premium and price coincided with an announcement from US President Donald Trump of a 25% tariff on heavy-duty truck imports from China. At the same time, Beijing responded by restricting rare earth exports used for high-tech manufacturing. 

China currently controls about 97% of global rare earth processing, which is why blocking exports is sensitive to global markets. Bitcoin faced accelerated outflows as investors sought to protect profits or limit downside.

On the technical front, Bitcoin’s rejection at the short-term holder (STH) realized price of $112,370 added to the bearish tone. The average cost basis for recently acquired BTC is now the crypto asset’s resistance zone. A sustained rejection below it could cause holders to hurriedly let go of their reserves and add more selling pressure to an already wounded Bitcoin market.

According to TradingView’s technical analysis, Bitcoin’s relative strength index (RSI) improved marginally to 35.9 from 35.0 but is still in oversold territory, meaning the asset could still face short-term volatility. 

Traders ready for a deeper negative correction

Market analysts and trader Dirk Crypto Diggy said on X that Bitcoin’s long-term chart forms a divergence that shows the coming bear market “might actually be worse than anything we’ve had before, both in depth and duration.”

Diggy told his followers if Bitcoin closes the month below $107,000, it will confirm the end of the current bullish cycle. 

“If we close at 107k or lower, I think the top is in, and we go a lot lower, so the bulls need to save this monthly close,” he said, mentioning how institutional interest could succumb to FUD and affect publicly traded treasury firms like Michael Saylor’s Strategy.

Bitcoin has maintained its position above the 200-day EMA for nearly six months, a trend previously seen from October 2024 to March 2025 before a brief breakdown where it consolidated at around $80,000, albeit climbing to highs of $100,000 last December.

In prior cycles, when Bitcoin lost the 200-day EMA, it entered a mute phase lasting between six and eight weeks. During the first quarter of this year, the coin formed a durable bottom about 50 days after its initial breakdown. If that rhythm repeats, the market may not see meaningful recovery until late November or early December.

“The last line of hope for BTC is that the 50-weekly moving average is still holding, and that support hasn’t been broken in this bull market so far. However, the RSI has been printing a clear bearish divergence on a weekly timeframe,” explained sports finance platform Rocketfan founder Christian Ott.

In the midst of all the negative momentum, a slight positive chart wave in the daily Coinbase Premium Index suggests that some US investors are accumulating BTC on dips cautiously. 

However, the macroeconomic tension between Washington and Beijing has introduced new uncertainty into global liquidity conditions, which could keep Bitcoin’s volatility elevated.

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