As an experienced financial analyst who has closely followed the Bitcoin market for several years, I find the recent analysis by this quant intriguing. The disappearance of miner selling pressure could indeed be a significant factor in a potential rally for Bitcoin during the third quarter of 2024.
A quant has shared his perspective on why Bitcoin could experience a price rise during the last quarter of 2024, attributing it to the diminished selling pressure from miners.
Bitcoin Miners Appear To Have Stopped Their Selling
In a recent analysis piece by CryptoQuant, an expert discusses how mining sell-off worries have eased up. Two relevant on-chain signals are under scrutiny.
The first method is called “Miner to Exchange Transactions.” As the name implies, it records the total volume of transactions taking place from miner wallets to those linked with exchanges.
As a researcher studying blockchain transactions, I have observed that a substantial increase in the number of deposits miners make to exchanges indicates a high value of this metric. The primary motivation driving chain validators to transfer their coins to these centralized platforms is often linked to selling activities.
In simpler terms, a downward trend in this indicator may forecast negative outcomes for the market due to potential selling pressure from miners. Conversely, low values of the indicator might indicate neutral or positive signs for the asset if miners are likely not selling through these platforms.
Here’s a chart illustrating the development of Bitcoin miner-to-exchange transactions over the last year.
In analyzing the graph before you, I’ve observed an upward trend in Bitcoin Miner to Exchange Transactions starting towards the end of 2023 and continuing until April this year. This increase in transactions coincided with the cryptocurrency’s price surge during that period.
The miners seemed to view the price surge as a chance to cash out, gradually increasing their selling efforts as the price neared a new record high (ATH).
After reaching its highest point in April, the indicator’s value has seen a significantly swift decrease. This could suggest that the demand from miners to sell has lessened.
Miners have alternative methods to sell besides exchanges. One such method is through over-the-counter (OTC) desks, frequently used by chain validators. The following chart illustrates the pattern in the Total OTC Desk Balance, which signifies the non-exchange and non-miner wallets to which miners transfer their coins when they decide to sell.
Based on the chart’s representation, it appears that the Total OTC Desk Balance had previously reached considerable heights. This implies that the entities presumed to be OTC desks were in possession of a substantial amount of coins at that time.
Lately, there’s been a significant drop in the indicator’s value over the past few days. This could be a sign that the cryptocurrencies accumulated in these digital wallets have been sold to someone.
As an analyst, I’ve observed a reduction in selling pressure from miners on cryptocurrency exchanges recently. Additionally, coins that were being held back for over-the-counter (OTC) sales have been absorbed into the market. These conditions seem to be setting the stage for another upward rally in the third quarter of 2024.
BTC Price
Over the past 24 hours, Bitcoin has bounced back, regaining its value above the $63,700 threshold.
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2024-07-02 06:40