IN analysis provided by CryptoQuant, a significant change in the behavior of Bitcoin miners has been noticed, potentially indicating a tipping point. The CryptoQuant analyst, known as Crypto Dan, outlined the reduction in miners’ selling pressure, which has historically been a key factor influencing Bitcoin’s price trajectory.
Bitcoin Mining Selling Pressure Is Decreasing
According to Crypto Dana, “Selling pressure from miners is decreasing. One of the whales that recently caused the cryptocurrency market to decline was miners.” He explained that the BTC halving, which halved mining rewards, led to a reduction in the employ of older, less productive mining rigs, which in turn reduced overall mining activity. This change forced miners to sell Bitcoin in over-the-counter (OTC) transactions to maintain their operations.
The analysis suggests that the market is currently absorbing the sell-off, with a noticeable decline in the volume and frequency of Bitcoin transfers from miners’ wallets. “The current market can be viewed as being in the process of digesting this sell-off, and fortunately the amount and number of bitcoins being sent from one’s wallets has been declining rapidly lately,” Crypto Dan stated.
The consequences of this change are significant. Crypto Dan added: “In other words, the selling pressure from miners is fading, and if all of their sales volume is absorbed, a situation may arise where growth can continue.” He projected optimism for the market, forecasting positive moves in the third quarter of 2024.
Historical data from CryptoQuant confirms the analysis. BTC has previously shown a similar pattern where miner sales exerted a powerful influence on market prices, particularly seen from May to September 2023 and from December 2023 to January 2024. During these periods, prolonged sideways movement in BTC prices was observed, consistent with miners’ sales peaks. Interestingly, when this selling subsided, Bitcoin prices resumed their upward trend.
This pattern suggests that the recent decline in mining rig sales could be a precursor to another significant bull run for Bitcoin, as market conditions appear ripe for a similar reversal.
Key price level for a bullish breakout
Next observations from technical analysts at Alpha dōjō provide a detailed look at market conditions. Their daily updates on Bitcoin to X highlight the current indecision in the market, characterized by Bitcoin “jumping around” without a clear directional move. However, the analysts have identified critical price levels that could indicate future market moves: “If BTC reclaims the $63.5k area, it would be bullish; if it loses the $60k level, it would be bearish.
Technical analysis also reveals that liquidity in the Bitcoin market is currently scattered, with few significant clusters of orders. The most noticeable concentration of orders is approximately 63.5 thousand. USD, which suggests that this price point is key to market sentiment and potential upside momentum.
Order book data provided by alpha dōjō highlights the current dominance of sell orders, indicating bearish sentiment among traders. On the other hand, the bid side is described as feeble, with fewer buy orders supporting bullish price moves. This imbalance suggests the market is currently cautious, potentially waiting for more definitive signals before committing to larger positions.
At the time of publication, the BTC price was $61,704.
Featured image created with DALL·E, chart from TradingView.com
