Bitcoin’s Coinbase Premium Turns Negative Amid US-China Trade Tensions

Bitcoin’s price saw a sharp drop from $111,000 on Thursday to as low as $103,000 by Friday, marking the first time since mid-September that the Coinbase Premium Index turned negative.

This index, which measures the price difference of Bitcoin (BTC) traded on the US-focused exchange Coinbase versus global platforms, dipped below zero early Friday morning, signaling a strong retreat from US investors amid escalating US-China trade tensions.​

In early October, institutional and retail investors in the US consistently bought Bitcoin, pushing the Coinbase Premium Index to a peak of 0.18 as BTC approached $110,000, its highest since March 2024.

However, this momentum collapsed when Bitcoin failed to sustain levels above $110,000, triggering an influx of sell orders and causing the price drop to below $104,000.​

US Tariffs Trigger Market Volatility

The negative shift in Coinbase Premium coincided with a 25% US tariff announcement on imports of heavy-duty trucks from China. Beijing responded by restricting rare earth exports, materials critical to high-tech industries.

China’s near-monopoly on rare earth processing—controlling roughly 97% of global supply—makes such export restrictions a sensitive issue affecting global markets.

This led to accelerated Bitcoin outflows, as investors moved to limit downside and preserve profits.​

Bitcoin’s technical analysis further adds to the bearish view. It faced rejection near a crucial short-term holder realized price of $112,370, a resistance level representing the average cost for recent BTC buyers.

A sustained fall below this level may push holders toward panic selling, intensifying downward pressure.

Additionally, Bitcoin’s relative strength index (RSI) sits at 35.9, close to oversold levels, indicating persistent short-term volatility.​

Trader sentiment is gloomy. A noted trader on X warned that if Bitcoin closes October below $107,000, it would confirm the end of the current bullish cycle and could lead to a prolonged bear market worse than previous ones.

The trader emphasized the importance of a monthly close above this threshold to maintain bullish hopes.​

Historical Patterns and Market Implications

Bitcoin has remained above its 200-day exponential moving average (EMA) for nearly six months, a trend previously observed between October 2024 and March 2025.

Past breaks below this level led to consolidation periods around $80,000 before gradual recoveries.

If history repeats, any significant recovery from the current dip might not emerge until late November or early December.​

Despite the negative momentum, a mild uptick in the daily Coinbase Premium Index suggests some US investors may still be accumulating Bitcoin during dips, albeit cautiously.

However, the ongoing US-China tensions could maintain high volatility levels in the near term, complicating recovery prospects