Bitcoin price continues to fall deep into the red zone as investors increasingly take the path of capitulation. Interestingly, a recent on-chain analysis was conducted that takes a deeper dive into the fundamentals that generally govern Bitcoin’s December price movement.
Coinbase Premium Suddenly Shifts into Negative Zone: Why This Matters
In a QuickTake post on the CryptoQuant platform, cryptocurrency education firm XWIN Research Japan reported that the Coinbase Premium Index indicator has recently plummeted. For context, this indicator measures the price difference between Bitcoin on the Coinbase (USD) market and Bitcoin on other major global exchanges (e.g. Binance) or the USDT market. This helps reflect the buy or sell bias of U.S. investors and provides insight into their behavior.
According to the Cryptocurrency Research Institute, the decline began in late November and early December. The apparent change in sentiment among U.S. investors appears to be the cause of the bearish pressure seen earlier this month, as this decline is also linked to the sharp decline in the price of Bitcoin.
Interestingly, there is a historical event that is similar to the previously mentioned scenario. Typically, in December, premiums become weaker compared to performance throughout the year. XWIN Research highlights that the figure is often close to or below zero, “primarily due to year-end rebalancing and tax loss harvesting by U.S. institutions and individuals.”
However, there were some deviations from this repetitive pattern. The markets were under significant stress in 2018 and 2022, pushing premiums deep into negative territory. On the other hand, premiums were positive in 2020 and 2023, which was positively correlated with the bull market momentum underway at the time.
‘December 2025 looks unique’ — Research Group
However, XWIN Research Japan said it was noteworthy that this year’s scenario had a “unique twist”. In particular, the Coinbase premium refused to stay that way despite starting in the negative in December. Instead, the analytics platform reports that there was an almost immediate rebound into positive territory as well as neutral levels.
Since this sharp reversal occurred in just a few days, it has become clear that the Bitcoin market may have witnessed the last strength of the existing bearish pressure. Interestingly, historical data shows that market-like movements often precede price stabilization or short-term recovery. So, if history is anything to go by, the Bitcoin price could be close to a local bottom and then recover.
Ultimately, XWIN Research points out that the stabilization or continued decline of the Bitcoin price will largely depend on “upcoming US capital flows, derivatives positioning, and premium trends.” As of press time, the value of Bitcoin is $89,321, with no significant movement since the last day.
Featured image from Flickr, chart from Tradingview
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