As an experienced analyst, I believe that the recent sell-offs by Bitcoin miners are a significant reason behind the flagship crypto’s price decline in June 2024. The wave of selling from miners, as revealed by IntoTheBlock, has been prompted by the profit margin squeeze caused by the halving event and the subsequent tepid price action of Bitcoin since its ATH in March.
As a Bitcoin investor, I’ve had better months than June. The value of my cryptocurrency holdings took a hit this month as Bitcoin underwent substantial price declines. Interestingly, recent findings suggest that Bitcoin miners were the primary instigators of these market downturns. They sold off their coins en masse, contributing to the overall price drop.
Bitcoin Miners Sold At An Alarming Rate
According to the Market Intelligence platform IntoTheBlock, Bitcoin miners have sold off more than 30,000 BTC, equivalent to $2 billion, in a post on X (previously Twitter). This marks the swiftest pace for miner sell-offs in over a year. The surge in selling can be attributed to the recent Bitcoin halving, which has narrowed the mining profit margins for these miners.
The latest reduction in miner rewards, from 6.25 Bitcoins to 3.125 Bitcoins during the last halving event, significantly impacted their earnings and profitability. Moreover, Bitcoin’s lackluster performance since reaching a new peak price in March has added to their financial concerns, leading miners to focus on short-term financial stability instead of relying on further Bitcoin price growth.
Due to increased expenses, these miners have been forced to sell a large portion of their Bitcoin holdings. Unfortunately, Bitcoin has suffered as a result, with its price dropping from approximately $70,000 at the beginning of the month to below $63,000 at present.
Expert: Crypto analyst Willy Woo recently pointed out the impact of miner sell-offs on Bitcoin’s current state. According to him, Bitcoin can only bounce back when “inefficient miners exit the market and hash rate recovers.” This means that the weaker miners will likely face bankruptcy while stronger ones upgrade their equipment. In simpler terms, Bitcoin needs to purge its weak players before it can regain strength.
If the miners continue offloading their Bitcoin at current rates, the cryptocurrency’s price may face additional downward pressure, potentially falling beneath the psychologically significant threshold of $60,000. On the bright side, a significant recovery is anticipated once these miners have sold off their holdings.
Another Reason Why BTC Risks A Further Downtrend
Crypto analyst Ali Martinez pointed out that approximately 5.45 million Bitcoin addresses purchased around 3.03 million coins when the price ranged between $64,300 and $70,800. He noted that this price range represents a substantial barrier for Bitcoin’s supply. Martinez cautioned that a potential sharp decline in Bitcoin’s value could occur as holders from this price range might sell their coins to minimize losses, potentially exacerbating the downward trend in Bitcoin’s price.
Bitcoinist recently reported that Bitcoin’s value dipped below the average price at which short-term holders initially bought the cryptocurrency, which was around $66,200. This development is important because if Bitcoin doesn’t recover quickly, short-term investors may choose to sell their holdings to minimize losses or lock in minimal gains from their Bitcoin investment.
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2024-06-24 16:11