Coinbase dominance relative to other bitcoin spot markets.
It compares the price of the Coinbase BTC/USD market to a volume weighted index of other top spot exchanges.
Positive values means the index is trading at a premium, which means Coinbase is more bullish than the rest of the market. Negative values means the index is trading at a discount, which means Coinbase is more bearish than the rest of the market.
Coinbase is known for institutional order flow so it's quite useful to know when the exchange is bullish. When it has a premium you can reasonably assume that Coinbase is bidding hard.
For trading I would mostly use this to confirm a bias on higher time frames, but it could also be used on lower time frames.
The index consists of:
Bitfinex USD
Bitstamp USD
Gemini USD
Binance USDT
Huobi USDT
Okex USDT
Kraken USD
FTX USD
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I had left a mistake in the code which is now fixed.
I also made a mistake in the description. It should be: Positive values means Coinbase is trading at a premium. Negative values means Coinbase is trading at a discount.