Ki Young Ju said the Coinbase Premium indicator has fallen to its lowest level in four years, interpreting the market’s intense pessimism as a bullish sign for Bitcoin.
In a post dated October 30, CryptoQuant CEO Ki Young Ju noted that Coinbase Premium last fell to similar levels in November 2022, immediately after the collapse of FTX. Ju recalled that Bitcoin also bottomed around that time.
A price gap that recalls the FTX period
Coinbase Premium is an indicator that tracks the difference between Bitcoin’s price on Coinbase and its price on the exchange used for comparison. So a four-year low refers to the price gap between exchanges, not Bitcoin’s dollar price.
The historical similarity Ju pointed to led him to assess today’s pessimism from a different angle. The analyst said market expectations had become pessimistic enough to warrant a bullish outlook.
Why did pessimism turn into a bullish outlook?
Rather than reading intense pessimism as a sign that the decline must continue, Ju’s approach is to assess it as a potential turning point. The November 2022 comparison is also cited as support for this view; the post gives no new price target or date for a reversal.
We covered Bitcoin’s recent decline and liquidations in leveraged trades in our previous article. Ju’s assessment offers a counterpoint to the selling environment, but there is no guarantee that a similar historical pattern will produce the same price outcome this time.
Not investment advice.