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Editor’s note: Good things will eventually happen, not whether it will happen, but when it will happen.
Historical data shows that some miners started selling Bitcoin (BTC) at the end of July, which led to increased selling pressure in the cryptocurrency market.
In the end, Bitcoin began to fall sharply in mid-August, with a drop of 13%. Since then, Bitcoin has been trying to recover the $12,000 mark.
From 2017 to 2020, miners sell Bitcoin Source: CryptoQuant
According to CryptoQuant CEO Ki Young Ju, the continued selling by miners may not be enough to stop the bull market. On-chain data analysis companies pay close attention to the activities of miners and whales because they hold large amounts of BTC.
On-chain analyst Willy Woo explained that miners are one of two external sources of Bitcoin selling pressure. He said before:
“There are only two unparalleled selling pressures in the market. (1) Miners who dilute the supply and sell them on the market are implicit taxes caused by inflation. (2) Taxes on traders and dumped in the market Exchange.”
When miners start selling their bitcoin holdings (usually used to pay fees), it may trigger a correction in the cryptocurrency market.
For example, from August 17 to September 5, the price of Bitcoin fell from $12,486 to $9813. During this period, several whales sold Bitcoin for $12,000, and the same behavior was found among miners.
The selling pressure from miners and whales is clearly attributable to the current downturn in the crypto market, but Ki explained that in the long run, this is not enough to prevent the arrival of a long-term bull market.
If miners suddenly sell a large amount of Bitcoin, this may cause a serious correction, as small price fluctuations may trigger liquidation by traders with extremely high leverage. Therefore, theoretically speaking, even a small number of miners sells, which may cause large price fluctuations.
Ki said that the miners’ selling intensity was not strong enough to stop a future bull market. He says:
“Some miners started to sell at the end of July, but I think that in the long run, the number of bitcoins sold by miners is not enough to stop the next bull market.”
According to data from ByteTree, the net inventory of Bitcoin miners has decreased by 125 BTC per week in the past 12 weeks. Data shows that miners sell approximately $1.362 million in BTC every week.
The number of BTC mined and sold in the last 12 weeks. Source: ByteTree
As Ki emphasized, the data showed that miners sold a large amount of BTC, but the amount did not match normal behavior.
The bull market cycle after the halving is still possible
Despite repeated attempts by the bears to drop the price below the key level, Bitcoin is still hovering above the key technical support of $10,000.
Under the huge selling pressure, Bitcoin’s resilience indicates a cautiously bullish trend in the long term.
Bitcoin short-term holder NUPL Source: Glassnode
Several on-chain indicators also indicate that now is the stage of hoarding Bitcoin. Rafael Schultze-Kraft, CTO of Glassnode said:
“In my opinion, short-term holders’ unrealized net profit/loss (STH-NUPL) is a bull market signal. The 0-line rebound is very important and is a typical feature of the previous bull market. Historically, this is a good one. Buying opportunities.”
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