The Coinbase premium index, a critical indicator used to assess Bitcoin retail demand in the United States, has seen a significant decline, reaching its lowest point in a year as 2025 approached. Analysts highlight that this downward trend could present difficulties for Bitcoin ’s short-term price recovery due to escalating selling pressure. On December 31, the index dropped to -0.23, coinciding with Bitcoin ’s decline to $91,479, its lowest price since late November.
This index functions as a gauge for Bitcoin (BTC) demand among everyday investors. An increase in the index reflects mounting buying pressure, whereas a negative value signifies increased selling activity. The recent drop in the index aligns with a low-liquidity market typically observed at the end of the year, a factor that has greatly influenced Bitcoin ’s current pricing dynamics. A similar low was noted in January when the first spot Bitcoin exchange-traded funds (ETFs) launched in the U.S. In addition, a temporary dip occurred just prior to the U.S. elections in late October.
Experts predict this situation may hinder Bitcoin ’s prospects of a quick rebound unless there are notable changes in macroeconomic factors or a rise in interest from both institutional investors and retail buyers. A key event that counts as pivotal for the crypto market is the upcoming inauguration of the President-elect on January 20, which is anticipated to spark renewed market activity.
In the meantime, long-term Bitcoin holders — defined as those who have held their investments for more than 155 days — are experiencing considerable profits. With a realized price standing at $24,298, these holders possess a remarkable 290% profit margin based on current valuations. Conversely, short-term holders, who have owned Bitcoin for less than 155 days, are facing a much steeper average cost basis, with their realized price at $86,753, yielding a modest profit of 9.29% at the current market rate. This disparity raises concerns about potential sell-offs as investors may opt to realize gains at the start of the new year.
