Bitcoin Recovery Gains Momentum: Key Indicators Signal Trend Reversal

Coinbase Premium Index Sends Buy Signal

After an extended correction phase, signs of stabilization in the Bitcoin price are mounting. A particularly watched indicator, the Coinbase Premium Index, has returned to positive territory for the first time in weeks, suggesting a return of institutional demand from the United States ^[2].

This index measures the price differential between Bitcoin on the U.S. exchange Coinbase and offshore trading venues. A higher price on Coinbase typically reflects direct purchasing interest from U.S. institutions and wealthy investors ^[2]. After the index remained in negative territory for nearly the entire month, traders are interpreting the current jump above the zero line as a significant shift in sentiment ^[2].

ETF Inflows Underpin Positive Developments

The improved sentiment is supported by concrete capital flows. U.S. spot Bitcoin ETFs recorded net inflows of an estimated $71.4 million on November 28 ^[2]. The field was led by Ark Invest and 21Shares' ARKB ETF with $88 million alone ^[2].

The picture is also brightening beyond Bitcoin: spot Ether ETFs posted inflows for the fifth consecutive day, totaling $76.55 million ^[2]. Even Solana spot products gained with $5.37 million in the black ^[2].

Market Sentiment Exits Zone of Extreme Fear

Another positive signal comes from the Crypto Fear & Greed Index, which climbed to 28 points, ending an 18-day period of "extreme fear" ^[1][2]. The return to the "fear" zone suggests a gradual normalization of market sentiment.

Technical Analysis Points to Recovery Potential

Analysts also point to technical factors that support a near-term recovery. Bitcoin has moved significantly away from the 50-week average, currently around $102,000 ^[1]. In previous market cycles, Bitcoin regularly returned to this level after falling below it ^[1].

Moreover, macroeconomic expectations are fueling near-term optimism. Speculation about an imminent end to quantitative tightening and possible further interest rate cuts could benefit risk assets like Bitcoin, as they would ease financial conditions ^[1].

Cautiously Optimistic Outlook

André Dragosch, research head at Bitwise Europe, sees significant upside potential for Bitcoin, arguing the current price does not reflect improving macroeconomic expectations ^[1]. He contends Bitcoin currently offers an "asymmetric" risk-reward ratio, similar to the COVID crash in March 2020, when prices initially plummeted before recovering strongly ^[1].

However, analysts also urge caution regarding the longer-term perspective. The broader market remains in bearish territory, and any recovery could later be followed by renewed weakness, as fundamental conditions have not yet signaled a decisive turn toward sustainable growth ^[1].

Critical for the coming weeks will be whether the Coinbase Premium Index remains in positive territory and ETF inflows continue ^[2]. Should this trend hold, it could sustainably stabilize the Bitcoin price and serve as a catalyst for a broader market recovery ^[2].