In the last two days, Bitcoin miners have sold off an astounding 85,503 BTC, leading to a significant drop in miner balances to around 1.95 million BTC – the lowest level observed recently. This sudden decrease marks the most substantial decline in miner holdings for the year 2024.
This development naturally prompts inquiries into its potential impact on the value of Bitcoin.
Impact of Bitcoin Miners’ Selling on Price Trends
The recent decrease in miner balances, the most pronounced since February, has not yet had a direct influence on the price momentum of Bitcoin. Data analysis from Santiment shows that on December 5th, the miner supply surpassed 2 million BTC.
However, this figure has since dwindled to approximately 1.95 million at the time of this report.
Historically, substantial sell-offs by miners often coincide with market adjustments. However, in 2024, there has been a disconnect between miner activities and price patterns. Despite these sell-offs, large non-mining entities have continued to amass Bitcoin – underscoring the intricate nature of market dynamics.
Currently, Bitcoin appears to be consolidating near the significant psychological barrier of $100,000. The Relative Strength Index (RSI) stands at 65.88, indicating that the asset remains in a bullish phase, although signs of being overbought have not emerged yet.
Both the Parabolic SAR and moving averages corroborate a bullish sentiment, with Bitcoin’s price comfortably surpassing the 50-day and 200-day moving averages at $83,504 and $67,953, respectively.
Network Metrics – Hashrate, Difficulty, and Revenue
An examination of Bitcoin’s hashrate reveals that it reached an all-time peak exceeding 900 EH/s, signifying intense competition among miners.
In parallel, a record network difficulty of 103.9T persists, indicating sustained mining activity despite the reduction in miner balances.
Moreover, miner income from transaction fees remains subdued, with fees contributing only about 10% to total miner revenues. This percentage is markedly lower than previous peaks in 2024, accentuating the miners’ reliance on block rewards.
Bitcoin’s Price Implications
The divergence between miner actions and price trends points to the maturation of Bitcoin’s market. Despite significant sell-offs by miners, the price of Bitcoin has shown resilience, remaining close to its all-time high as buyers enter the market to counter the selling pressure.
However, continued selling by miners could introduce heightened volatility, especially when coupled with broader economic or liquidity concerns.
Bitcoin’s ability to sustain its price near $100,000 amidst notable miner selling signifies the increasing impact of non-mining market participants and the broader adoption of the digital asset.
As miners adjust their positions, market observers will closely monitor Bitcoin’s ability to surpass its psychological hurdles and maintain its upward trend. The upcoming weeks will be crucial in determining whether the recent miner sell-off signals a potential shift or merely reflects short-term market shifts.