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Coinbase users are most active just before price surges – but why?

Newly published data from Ogury shows that user activity on Coinbase was highest during the volatile month of December.



Are Coinbase users really good at anticipating bitcoin price surges, or does increased activity in itself contribute to volatility? That is one of the main questions to come out of new data published by mobile data platform Ogury.

The data is drawn from Ogury’s new tool, Active Insights, an app ecosystem intelligence solution. It shows that Coinbase users seem to have been using the app most heavily immediately prior to marked increases in the price of Bitcoin.

Users checked the app up to 7.5 times a day during December, a month of marked volatility in the price of Bitcoin, in which it rose to a high of $20,000. On December 12th, Coinbase experienced a spike in active users, rising 10 per cent in two days to 40 per cent. The price of Bitcoin climbed commensurately in the hours following this period of increased activity.

By early February, the price of Bitcoin had plunged to below $7,000. At the same time, users were checking the app just 2.3 times a day. On February 5th, Coinbase saw a steep decline in active users to almost 15 per cent.

The graphs below illustrate the trajectories of Coinbase activity and Bitcoin pricing in recent months. Ogury states that the data shows a ‘direct, predictive’ relationship between the two.

“With these data findings alone, it is only possible to speculate on the driving factors behind this suggested relationship,” said Daniel Warner, head of supply UK at Ogury.

“However, our results might suggest that the sheer volume of users accessing trading apps such as Coinbase, the frequency of which they're opened, and ease of trading could play a part in the volatility of the price. This data does at least highlight the significance of analysing app-user engagement to identify correlations in one of the most intriguing financial phenomena of recent times.”

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