Coinbase Premium Heatmap

3 thg 12, 2024

Coinbase Premium Heatmap visualizes spot bitcoin premium (or discount) on Coinbase, relative to other spot markets, visualized as a heatmap overlay.

OPTIMIZED FOR CLARITY

Coinbase Premium can whipsaw quickly, with dramatic state changes over relatively brief periods, unnecessarily complicating its use (for our purposes).

To mitigate whipsaws, the script (a) averages premium/discount on an hourly basis, and (b) introduces lightweight exponential smoothing, to further simplify/clarify state.

WHY IT MATTERS

Spot Coinbase premium is a strong proxy for bullish institutional sentiment and net inflows/accumulation by western financial institutions, ETF providers, and corporations (like MicroStrategy) adding bitcoin to their treasury.

In aggregate, this holder cohort drives trend & sentiment more than any other, so it's important to know their directional bias.

HOW IT'S CALCULATED

Premium / discount calculates the spread between Coinbase spot BTC price, and spot price on Binance + Bybit. Calculation is averaged hourly, with light exponential smoothing.

HOW WE USE THE SCRIPT

When assessing optimal moments to hedge exposure (or sell spot assets) near a presumed impending cycle top, awareness of institutional sentiment is a crucial variable. This script:

(a) Filters out unnecessarily early cycle exit signals (if Coinbase premium is still present)

(b) Confirms other metrics that indicate an impending cycle top (if the neutral to bearish institutional sentiment we'd expect to see is in effect), and

(c) Visualizes state changes (from bearish to bullish & vice versa), that often make for good swing entries & exits on lower timeframes.

12 thg 12, 2024

Phát hành các Ghi chú

Minor update, does not affect output.