The positive seasonality known to affect the bitcoin market during the last quarters of every halving year is wearing off, as seen in BTCs price movements over the past two weeks. This trend is often driven by high demand from investors; however, recent data shows that these market participants have slowed down in their acquisition of BTC.

The decline in demand, especially from investors in the United States, is seen in the Coinbase Premium Index, which fell to a level not seen in the past 12 months.

Coinbase Premium Slumps Again

According to a report from the CryptoQuant official Burakkesmeci, the Coinbase Premium Index,  which monitors BTC demand from U.S. retail investors, has fallen to -0.237, its lowest point since December 2023.

This metric fell to -0.200 on October 25, 2024, shortly before the United States presidential elections, due to heightened uncertainty about the outcome of the political race. However, the indicator surged above 0.15 a few weeks later as BTC rallied above $100,000 following President Donald Trumps election victory.

The indexs latest plunge came as BTC fell below $92,000 to roughly $91,300 at the start of the current business week. Burakkesmeci said the index was also affected by a low-liquidity bitcoin market at the end of the year and increasing seller pressure on U.S. soil.

Room for Price Rally?

Outflows from the U.S.-based spot Bitcoin exchange-traded funds (ETFs) market prove American investors have been selling their BTC. These products bled roughly $700 million on two out of the last three trading days of the year, and even on the day of inflows, they collectively recorded a measly $5.3 million in injected capital.

Even during the four days leading to Christmas, the spot Bitcoin ETFs shed more than $1.37 billion as investors scrambled to withdraw their funds. Burakkesmecis analysis indicates weak institutional demand and a cautious sentiment among U.S. bitcoin investors.

This drop not only signals a lack of institutional demand but also underscores the cautious sentiment among U.S. investors. Such trends can create a challenging environment for Bitcoins short-term price recovery unless we see a shift in macroeconomic conditions or renewed interest from institutional or retail buyers, the analyst stated.

Nevertheless, a drop in the Coinbase Premium Index signals room for price growth, meaning that bitcoins value could experience a recovery in no distant time.