The selling pressure from Bitcoin [BTC] miners has grown stronger as the BTC price surpassed $90,000. Between November 10th and 17th, miners offloaded over 110,000 BTC, equivalent to almost $10 billion within a week.
On November 12th, the most significant daily sell-off took place, with 25,367 BTC (approximately $2.2 billion) being sold by miners.
Since October, there has been a steady increase in miner sell-offs amidst a broader market recovery.
However, the heightened sell-off pressure this week has raised concerns about the potential impact on BTC’s ability to reach the psychological milestone of $100,000.
Historically, elevated miner sell-offs and revenues have signaled local or cycle peaks. If the current trend continues along this path, it could prompt other investors to follow suit and sell their holdings.
Given the current scenario where BTC is approaching $90,000 and targeting $100,000, what is the cycle status?
Deciphering BTC’s Cycle Peak
From a miner’s viewpoint, a spike in miner fees (yellow) exceeding 30% of total revenue has typically aligned with previous BTC cycle peaks.
An elevated reading indicates excessive optimism in the BTC markets, leading to transaction fees soaring significantly compared to rewards—an indication of an overheated market.
In November, miner fees remained around 10% of total revenue, suggesting that the market had not yet reached overheated levels.
Another metric, the Pi Cycle Top, indicated limited potential for a BTC rally before the market becomes overheated.
Historically, BTC’s movement above the moving average (350DMA x2, green line) signaled the cycle peak and served as a sell-off signal for holders.
The green line reading pointed to $120,000, implying that a BTC surge beyond this level could be considered a sell signal.
Interestingly, the $100,000 to $120,000 price targets were widely anticipated by major players in the options market, as highlighted by QCP Capital, a leading crypto options trading firm. The firm recently stated,
“Given Bitcoin’s remarkable rally post the US election, we believe that $100,000 – $120,000 may be attainable soon.”
If this holds true, a significant move past $120,000 could activate the Pi Cycle Top indicator and subsequently lead to profit-taking across all categories of BTC holders. This would signify a 30% increase from the current $90,000 mark.