The recorded data shows that many cryptocurrency miners began to sell Bitcoins (BTC) at the end of July 2020, leading to elevated pressure in the cryptocurrency market.
The action of selling the crypto coins led to the fall of the dominant cryptocurrency from mid of August 2020, thus recording a steep 13 percent downslide. The Bitcoins have since struggled to reach the $12 K benchmark.
As per CryptoQuant CEO Ki Young Ju, miners’ continued selling might not be sufficient to stop the next Bull Run. Based on the On-Chain data analysis firms’ observation, the miners and the Whales hold a considerable amount of Bitcoins. Data shows that whales are not selling Bitcoins, and institutions are collecting BTC.
Willy Woo, an On-Chain analyst, said that there are two unmatched sell pressures in the market. The first one is the miners who dilute the supply of crypto and sell onto the market leading to hidden tax via monetary inflation. The second ones are the exchanges that tax the traders and sell onto the market.
Miners sell crypto coins mainly to cover expenses, which leads to a correction in the cryptocurrency market.
Take the example of the period between August 17, 2020, and September 5, 2020, when the Bitcoins’ price dropped from $12486 to $9813, resulting from Bitcoins’ sale by whales at $12000. The miners, too, followed the same path.
The recent crypto market slump has resulted from the selling pressure from the whales and the miners; however, Ki explained that it is not enough to stop an extended bull run.
If the miners keep on selling BTC, it could lead to a healthy correction as a small price movement could lead to liquidation from highly leveraged traders. So even a small sell by the miners could cause a substantial price swing.
Ki was quick to point out that the miners’ sell-off was not strong enough to stop the future bull run in the crypto market.
On these said lines, ByteTree pointed out that Bitcoin miners’ net inventory decreased by 125 BTC per week in the last 12 weeks. The report suggested that miners sold approximately $1.362 million Bitcoins per week over and above the Bitcoins they mined and sold.
As Ki had been emphasizing, the data, as mentioned above, shows that the miners have sold a lot of BTC, but not an abnormal selling. It was instead a typical market behavior.
Bull still seems a possibility.
Bitcoin is still levitating around the $10000 technical support level despite multiple bear attempts to bring the level below the $10 K mark.
The substantial flexibility of cryptocurrency, primarily Bitcoin, suggests a bullish trend amidst the intense selling pressure in the coming days.