Bitcoin Set for Short-Term Rally with Bullish Coinbase Signals

Despite several significant upward movements, Bitcoin has yet to surpass the much-anticipated $70,000 mark.

Nevertheless, data suggests the potential for a short-term uptrend in BTC, as indicated by the Coinbase Premium Index. If this trend continues, the cryptocurrency could experience a notable price rally.

Is a Bitcoin Price Rally on the Horizon?

By analyzing the Coinbase Premium Index on a one-hour basis, CryptoQuant analyst ‘Yonsei_dent’ noted substantial price changes when the daily (24-hour) moving average crosses above the weekly (168-hour) moving average.

Historical trends indicate that such crossovers, often termed golden crosses, typically lead to short-term price gains. At present, the daily moving average has briefly exceeded the weekly, signaling a potential bullish trend.

With Bitcoin priced around $67,000—a critical support level linked to the September high—and a consistent sequence of higher highs and lows observed since August, the analyst believes the market is establishing a clear upward trajectory.

Similar views have been shared by analysts at Kaiko, who pointed out the negative Kimchi Premium. This phenomenon could also indicate a forthcoming rally for Bitcoin, despite the ongoing downturn in the South Korean market.

This premium reflects the discrepancy in BTC prices between Korean exchanges and global platforms, and it has turned negative for the second time since September. This trend mirrors the declining sentiment among investors in South Korea, where BTC prices are lower even as global prices are on the rise.

Factors contributing to this situation include stringent government capital controls that restrict foreign trading on local exchanges, alongside a limited supply of cryptocurrencies available on platforms like Upbit, which offers significantly fewer coins compared to its global counterparts. Historically, a negative Kimchi Premium has often preceded considerable price rises for Bitcoin.

Surge in Retail Activity

Additionally, it’s noteworthy that BTC is experiencing a significant rebound in retail on-chain activity following a four-month period of diminished engagement. The volume of on-chain transactions below $10,000 has increased, signifying a resurgence of interest from smaller, non-institutional investors.

In the last 30 days, retail demand has surged by 13%, highlighting a significant recovery compared to previous months of decline. This level of activity is reminiscent of March when BTC was nearing its most recent all-time high.

While whale transactions have remained robust during the downturn, the current rise in Bitcoin prices suggests a decrease in risk aversion among smaller investors, potentially driving a greater retail momentum in the market.