Bitcoin (BTC) has recently entered a consolidation phase, hovering between $61,000 and $62,000 after briefly falling to $58,000 on June 24. While retail investors have shown renewed interest, as have institutional investors, the market is facing a mixed bag bull signs and potential adversities.
Retail investors are returning to bitcoin
In the recent social media postCryptocurrency analyst Ali Martinez highlights the resurgence of retail investors, as evidenced by the four-month high of up-to-date BTC addresses reaching 432,026, which reinforces investor sentiment that they are betting on a significant boost in BTC prices in the coming months despite recent price volatility.
In a separate fasting Analyzing the recent BTC price volatility, Martinez also suggested that the market’s largest cryptocurrency is currently in a parallel channel, with a potential rebound to $63,200 or $63,800 if the lower bound at $62,500 holds.
In particular, Martinez I quote key resistance areas at $65,795 and $78,700 will be key targets if BTC breaks through them.
However, not all news is positive for the Bitcoin market. Over the past 72 hours, BTC miners over 2300 BTC sold worth about $145 million. This selling pressure is contributing to the ongoing sell-off of confiscated BTC by the U.S. and German governments.
Mining industry under pressure
The mining industry is facing challenges due to lower network fees and lower block rewards following the Halving event in April.
Kaiko’s research notes that average network fees dropped from $3 to $5, a significant drop from around $45 in January. The halving caused block rewards to drop from 6.25 BTC to 3.125 BTC, impacting miner revenues.
This drop in revenue puts pressure on miners, reducing profitability, while fixed costs such as energy, wages, and rent remain constant. The drop in network fees has further contributed to the drop in revenue.
Historically, Bitcoin price increases following Halving events have helped miners compensate for the drop in rewards. However, Bitcoin price has remained relatively flat since April 19 Software update.
In April, fees briefly rose to almost $150 due to increased coin production. non-fungible tokens (NFTs) on the BTC blockchain. While this temporarily provided some relief to miners, fees have since returned to average levels.
According to Bloomberg, Marathon Digital, one of the largest bitcoin mining companies, sold 390 BTC in May and plans to sell more tokens to manage its finances.
Kaiko Research warns that the risk of forced sales by miners could persist in the coming months. As a result, the industry is expected to see consolidation as miners seek to “consolidate assets” and “increase efficiency.”
Notable examples include the “hostile takeover attempt” of Bitfarms Ltd. by mining company Riot Blockchain and CleanSpark Inc.’s recent agreement to acquire Griid Infrastructure Inc. for $155 million as part of all stock transaction.
At the time of writing this text, BTC continues to consolidate in the $61,880 range, down 2% in 24 hours, erasing all gains made in the last 30 days, as losses in that time frame stand at 9%.
Featured image from DALL-E, chart from TradingView.com
