Sharp Decline in Ethereum’s Coinbase Premium Gap Signals Weak US Institutional Demand
A sharp decline in Ethereum’s Coinbase Premium Gap into negative territory indicates weakening demand from US institutional investors, acting as a significant barrier for the price to reclaim the $3,300 level.
The Coinbase Premium Gap is a critical on-chain metric that measures the price difference between Coinbase (a proxy for US institutional sentiment) and Binance (representing global retail sentiment). Recent data shows concerning developments.
According to the latest readings, the 14-day Simple Moving Average (SMA) of the Coinbase Premium Gap has dropped to -2.285, marking its lowest level since early February 2025. This sustained negative gap clearly indicates that selling pressure—or, more precisely, a lack of buying interest—is significantly stronger on Coinbase compared to Binance.
Market Context & Price Behavior
This on-chain weakness is emerging while Ethereum continues to struggle below the heavy resistance zone at $3,300, following its correction from the $4,700 peak registered in October.
Key observations include:
Weak US Demand: Historically, sustainable Ethereum rallies have been accompanied by a positive Coinbase Premium, where prices on Coinbase trade higher than those on Binance. The current negative reading suggests that US-based institutional investors (“smart money”) are not actively accumulating ETH at current price levels.
Bearish Divergence: The lack of institutional inflows via Coinbase, while price action attempts to stabilize, creates a clear bearish divergence between price and on-chain demand indicators.
Conclusion
Until the price gap between Coinbase and Binance returns to positive territory and genuine demand reappears in the US spot market, the probability of a confirmed breakout above the $3,300 resistance remains low. Traders should remain cautious, as the persistence of this negative trend increases the risk of further downside correction.
Written by CryptoOnchain