Bitcoin Miners Accelerate Selling As Bears Take Charge; What’s next for BTC?
Bitcoin (BTC) miners are increasingly changing their historical BTC holding strategies as the bear market prevails. In particular, miners known to accumulate Bitcoin and act as a market buffer are offloading their catch at alarming rates.
In particular, at Bitcoin’s current price, the Bitcoin Miner Sell Pressure tracker indicates an extraordinary selling activity by miners, which is marked in red color. The sales rate is “almost” higher than compared to five years ago, data presented by the founder of Capriole, Charles Edward, on November 11 indicates.
Implications of increased miner selling pressure
The selling pressure for the Bitcoin miner partly points to the reality of the crypto market correction. In particular, amid falling Bitcoin prices, miners have been operating in a high-inflationary environment with a weakened world economy. Therefore, the sales trend can be attributed to an initiative to cover operating costs such as electricity payments.
In previous years, some miners have been known to hoard the asset in anticipation of the price rising, while others take out loans to finance operating expenses. At the same time, miners tend to sell more when they are also losing money.
Although miners may have built a reputation for being bullish even when bearish conditions prevail; therefore, the selling price is likely to send shock waves.
In general, the crypto winter has hit the mining industry hard, with listed companies reportedly going bankrupt, leaving them with no choice but to sell BTC. For example, an earlier report indicated that miners had been forced to sell their equipment at a discount after being rendered unprofitable.
Furthermore, analysts have predicted that if Bitcoin prices continue to fall, the fate of Bitcoin mining will be in trouble. As reported by Finbold, Frank Holmes, CEO of investment firm US Global Investors suggested that if Bitcoin reaches $12,000, mining may shut down globally.
Impact on Bitcoin’s price
Although increased mining sales reflect the general state of the market, the trend has historically been used as a precursor to a possible upside movement in Bitcoin’s value. In this case, the calculation usually points to a potential bottom.
Bitcoin is still trying to find a bottom after correcting further below $20,000. The asset breached $20,000 as the market tried to adjust to the FTXcrypto exchange debacle. At press time, the asset was trading at $16,500.
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