- Bitcoin faces downward pressure as Bitcoin miners exact immense selling pressure as they offload 1,200 BTC.
- Analyst Willy Woo warns that this pressure could lead to a price dump to the $62,500 level.
Crypto analyst Willy Woo has warned that Bitcoin could face immense bearish pressure as miners begin to offload their stash. The analyst warns that miner capitulation risks Bitcoin entering a bearish trend. Typically, when supply exceeds demand, this leads to a price drop.
Miners need to sell the coins they receive to ensure the smooth operation of their business. In some instances, miners hold on to their stash in anticipation of a price rise which would translate to a higher payday. However, when bills catch up or there is little optimism about a price rally, the miners are quick to sell.
CryptoQuant Head of Research Julio Moreno has revealed that on Monday, miners sold 1,200 BTC marking the largest daily miner selling since March. This suggests that miners are under tremendous pressure or are bearish over the digital asset.
With these transactions taking place over-the-counter (OTC) as opposed to the popular crypto exchanges, this suggests that the miners are choosing to be discreet about their trades, presumably to limit the immediate impact on BTC prices. OTC data shows Bitcoin OTC desk balances for miners have surged by 54,000 BTC, reaching a year-high.
#Bitcoin undergoing a rare miner capitulation. This one is from the halvening event, culling weak miners. As they die, they dump BTC, price rebounds afterwards.
But first we need to purge the degen open interest in futures bets. Liquidations need to happen before a pump. pic.twitter.com/xsSdg5QMsP
— Willy Woo (@woonomic) June 10, 2024
Analysts point to the recent Bitcoin halving, which takes place in four-year cycles, leading to the reward offered to miners being slashed by half. This means that miners’ profits are slashed by half. In a majority of instances, this leads to miners failing to sustain their operations and leaving the space. Historically, BTC prices have rallied to new all-time highs, compensating for the reduced quantity but with prices failing to sustain any bullish momentum since the halving, miners could be facing financial trouble, hence the recent coin dumping.
Taking into account the recent miner behavior, analyst Willy Woo has warned that the increased supply could increase bearish pressure, leading to a price drop to the $62,500 support.
At the time of writing, BTC is trading for $69,764 after a 4% surge in the last 24 hours. This has seen the leading digital asset recuperate part of its weekly losses which stands at 1.2%.
However, it is important to note that investor appetite for the digital asset is at an all-time high with the increase in Bitcoin ETF inflows. As CNF has reported, Spot Bitcoin Exchange Traded Funds (ETFs) in the US have reportedly acquired approximately 25,729 Bitcoin in the week ending June 7. This amount matches two months of crypto mining supply and more than eight times the new BTC mined within the week.
If this demand persists, miners selling their stash could cause little to no negative effect on the prices.
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