Over the past two months, Bitcoin miners have sold a sizable amount of BTC. Many on-chain analysts are confident that these actions will not halt market growth.
Data from CryptoQuant shows that some miners began selling Bitcoin as early as the end of July, putting pressure on the price.
As a result, there was a sharp drop in the cryptocurrency’s price from mid-August — a decline of 13%. Since then, BTC has been attempting to reclaim the $11,000 level.
Dynamics of the Miner’s Position Index in 2017-2020. Data: CryptoQuant.
According to CryptoQuant CEO Ki Young Ju, miners’ selling of cryptocurrencies will not be able to stop market growth.
On-chain analyst Willy Woo explained: miners represent one of two external sources of selling pressure on Bitcoin. Earlier he said:
“There are only two truly strong pressure factors in the market — miners who dilute supply and sell into the market (this is a hidden tax via monetary inflation), and exchanges that tax traders and also sell into the market.”
Massive Bitcoin selling by miners could trigger a correction in the cryptocurrency’s price. For example, from August 17 to September 5, the price of Bitcoin fell from $12,486 to $9,813. During this period, several whales sold Bitcoins at $12,000, and a similar pattern was observed among miners.
The price pressure from miners and whales is explained by the current cooling of activity in the cryptocurrency market. In the longer term, Ki said, this pressure is not enough to stop market growth.
If miners suddenly sell a substantial amount of BTC, this could trigger a serious correction, as even a small price movement can trigger liquidations of positions held by traders using high leverage.
Miner Update: Some miners began selling at the end of July, but I think in the long-run, miners didn’t sell $BTC large enough to stop the next bull-run.https://t.co/X0Uf3Sfzck pic.twitter.com/pHrmaylPyz
— Ki Young Ju (@ki_young_ju) September 20, 2020
Some miners began selling Bitcoin in late July; in the long run, the volumes sold by miners are not enough to stop the next rally.
According to ByteTree, over the last three months Bitcoin miner inventories have declined by 125 BTC per week. The data show that they sold cryptocurrency worth $1.362 million per week. This is in addition to the BTC they sold immediately after mining.
Bitcoin mined and sold over the last 12 weeks. Data: ByteTree.
Bitcoin remains above the important support level of $10,000, despite numerous attempts by bears to push the price below this key level.
This resilience amid heightened selling pressure gives analysts reason to expect a cautious bullish trend in the long term.
Several on-chain metrics also indicate that Bitcoin has entered a healthy accumulation phase.
“Net unrealized profit/loss of short-term holders” shows a bullish signal. This bounce off the zero level is important, characteristic of previous bull markets and, historically, has been a good buying opportunity,” said Glassnode’s Chief Technology Officer Rafael Schultze-Kraft.
NUPL (net unrealized profit / loss) of short-term holders of Bitcoin. Data: Glassnode.
Last week, Ki Young Ju discovered another factor driving Bitcoin’s price.
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