In an evaluation provided by CryptoQuant, a big change in Bitcoin miner behavior has been noted, potentially indicating a turning point. CryptoQuant analyst, referred to as Crypto Dan, outlined a discount in miners’ selling pressure, which has historically been a pivotal factor affecting Bitcoin’s price trajectory.
Bitcoin Mining Selling Pressure Decreases
In line with Crypto Dan, “Miners’ selling pressure decreases. One among the whales which have caused the cryptocurrency market to fall recently have been miners.” He explained that the BTC halving, which halved mining rewards, led to a decrease in using older, less efficient mining rigs, subsequently reducing overall mining activity. This alteration forced miners to sell Bitcoin in over-the-counter (OTC) transactions to sustain their operations.
The evaluation suggests that the market is currently absorbing the sell-off, with a notable decline in the amount and frequency of Bitcoin being transferred out of miners’ wallets. “The present market may be seen as being within the strategy of digesting this sell-off, and fortunately, the amount and variety of Bitcoins miners are sending out of their wallets has been rapidly decreasing recently,” Crypto Dan stated.
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The implications of this shift are significant. Crypto Dan added, “In other words, the selling pressure of miners is weakening, and if all of their selling volume is absorbed, a situation could also be created where the upward rally can proceed again.” He projected optimism for the market, predicting positive movements within the third quarter of 2024.
Historical data from CryptoQuant corroborates the evaluation. BTC has previously shown the same pattern where miner selling activity exerted a robust influence on market prices, particularly noted from May to September 2023 and from December 2023 to January 2024. During these periods, prolonged sideways movement in BTC prices was observed, aligning with peaks in miner selling. Notably, when these selling activities diminished, Bitcoin prices resumed an upward trend.
Bitcoin miner withdrawing transactions | Source: CryptoQuant
This pattern suggests that the recent decrease in miner selling might be the precursor to a different significant bullish phase for Bitcoin, as market conditions appear ripe for the same reversal of fortunes.
Key Price Level For A Bullish Breakout
Further insights from technical analysts at alpha dōjō provide a granular view of the market conditions. Their every day update on Bitcoin through X underscores the present market indecision, characterised by Bitcoin “chopping around” without clear directional movement. Nonetheless, the analysts have identified critical price levels which could indicate future market movements: “If BTC reclaims the $63.5k area, it will be bullish; if it loses the $60k level, it will be bearish.”
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The technical evaluation also reveals that the liquidity within the Bitcoin market is currently dispersed, with few substantial clusters of orders. Probably the most notable concentration of orders is across the $63.5k level, suggesting that this price point is pivotal for market sentiment and potential bullish momentum.
BTC heatmap | Source: X @alphadojo_net
The order book data provided by alpha dōjō highlights a current dominance of sell orders, indicating a bearish sentiment amongst traders. Conversely, the bid side is described as weak, with fewer buy orders supporting upward price movements. This imbalance suggests that the market is currently cautious, potentially awaiting more definitive signals before committing to more substantial positions.
At press time, BTC traded at $61,704.
BTC trades above $61,000, 1-day chart | Source: BTCUSD on TradingView.com
Featured image created with DALL·E, chart from TradingView.com