As a seasoned crypto investor with a decade of experience under my belt, I must admit that the recent developments in the Bitcoin market have me both excited and cautious. On one hand, it’s thrilling to see Bitcoin breaking new all-time highs, pushing past the $90,000 mark and making yet another leap towards the elusive $100K. However, I’ve learned over the years that every bull run has its challenges, and this one seems no exception.
Bitcoin miners have sold around 25,000 Bitcoins from their earnings during the recent surge. Currently, the price of Bitcoin has surged over 4% within the past day, reaching an astounding $90,000 – a new record high. However, on-chain indicators suggest that achieving the next milestone at $100,000 may encounter obstacles, potentially causing a slight delay in its arrival.
Bitcoin Miners Heavily Selling Their BTC
Julio Moreno, the research chief at CryptoQuant, pointed out that Bitcoin miners are capitalizing on the recent spike in price beyond $90,000. This is supported by their movement of a significant portion of their Bitcoin holdings from their wallets. On Wednesday alone, an outflow of approximately 25,000 Bitcoins was observed, indicating active selling by miners as the BTC price hit new peaks.
After the Bitcoin halving in March 2024, miners had to sell more of their BTC to cope with increasing expenses and lower profits. This heavy selling caused a period of about 200 days where the price of Bitcoin stabilized. Eventually, it surpassed its previous record highs of $74,000. Now that the price has risen above $90,000, there could be another wave of selling from miners due to renewed pressure on their profits.
Furthermore, it’s worth noting that according to Moreno, the profit margins of traders have climbed to a significant 47%. This could be a sign of an upcoming correction or crash in the Bitcoin market. In the past, such high profit margins have often been followed by market downturns, with peaks at 69% in March and 48% in December 2023. The current level is causing concern among analysts as Bitcoin approaches its recent record highs, making them wary of potential price adjustments.
While Bitcoin recently reached an unprecedented peak, there’s been a swell in voices advocating for a price point of $100,000. Nevertheless, data from blockchain analysis firm Santiment suggests a potential reversal trade might occur, potentially postponing this bullish trend. The report stated:
On social media, there’s a lot of excitement about market peaks. Instead of following the crowd blindly during record-breaking times, trade with conviction. Traders who are successful in history often buy when the crowd expresses doubt, especially when prices make retail investors sell. If you see an influx of FOMO (Fear Of Missing Out) on social media, it should serve as a warning sign.
Mining Company Stocks on Freefall, What’s Next for BTC Price?
The Bitcoin mining stock surge in relation to the US election has ended prematurely due to Q3 financial reports that did not meet projections. On Wednesday, November 13, shares of prominent companies such as Marathon Digital (NASDAQ: MARA), Riot Platforms (NASDAQ: RIOT), CleanSpark (NASAQ: CLSK), and others experienced a significant drop of approximately 12-15%.
Some market analysts believe that this shouldn’t be much of a concern considering that the mining stocks have never moved in tandem with the Bitcoin price.
For those worrying about today’s price action vs Bitcoin: Miners will do their own thing.
Over the past three years, stocks related to Bitcoin mining haven’t generally shown a strong correlation with Bitcoin price movements.
Some miners have a higher correlation than others, but none are above 0.6.…
— Matt Faltyn (@mattfaltyn) November 14, 2024
Some people think that Bitcoin could return to test its previous high of around $74,000 before potentially reaching the $100,000 range, given the current Bitcoin miner selloff. As a result, investors may choose to exercise caution before establishing new positions. Additionally, inflows into Spot Bitcoin Exchange-Traded Funds (ETFs) have been decreasing slightly after a significant increase last week.
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2024-11-14 13:24