Analyst Predicts Bitcoin Surge as Spot Premium Drops

A low Bitcoin spot premium, not seen since the FTX crash, signals potential price growth, according to crypto analyst Wise Advice.

The self-proclaimed top Asian crypto influencer points to the BTC Open Interest (OI) weighted spot premium as a key indicator. This metric reflects the price difference between the BTC spot market and the futures market, and currently shows the spot price exceeding that of futures.

Wise Advice sees this as a positive sign, as it indicates accumulation by investors. Large-scale purchases, such as Michael Saylor’s reported $2 billion Bitcoin purchase and other institutional investments, might also be influencing the premium.

Looking at a BTC/USDT chart on Binance-Futures, which includes an “Aggregated Premium” indicator, Wise Advice observed that positive premiums usually align with price increases. The chart shows a significant uptrend in BTC/USDT from mid-2023, peaking in early 2024, followed by a slight decline. The premium indicator moves around a zero line, with green areas representing positive premiums and black areas indicating negative ones.

Positive premiums often happen alongside upward price movements, suggesting bullish sentiment in the market. On the other hand, negative premiums are seen during price declines or consolidation phases, indicating bearish expectations. Wise Advice also stressed the importance of watching for divergences between price and premium, as these could signal potential shifts in market momentum.

The current premium levels and their historical relationship with price trends suggest an accumulation phase in the Bitcoin market. However, Wise Advice cautions that such trends take time to fully play out, advising patience as the market may eventually move toward a more parabolic phase.
Bitcoin is currently trading at $59,457, down 2% over the past 24 hours. The trading volume also took a hit, dropping 2.11% to $27.4 billion in the same timeframe. Based on Coincodex’s technical indicators, BTC’s price is predicted to increase by 1.00%, reaching close to $60,000 on August 22, 2024.

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