The selling pressure from miners has decreased substantially after the Fed-triggered downturn in December. In November and December, during the ‘Trump pump’, the surge in price led to miners cashing out their profits.
However, the selling pressure from miners has significantly reduced as we enter the New Year, according to Charles Edwards, founder of Capriole Investment. Edwards considered this level to be healthy, below 1, and viewed it as a positive indicator for Bitcoin.
It’s worth noting that the drop in Bitcoin selling by miners coincided with the peak price of $108K reached last month. As per CryptoQuant data, the quantity of Bitcoin stored in miner wallets decreased from approximately 1.813 million to 1.807 million units.
In the recent past, I’ve noticed a significant trend: Miners have disposed of approximately 6,000 Bitcoins in December alone. This follows a pattern that began in late November, where they sold close to 8,000 Bitcoins from their reserves.
Currently, as we speak, the Miner Reserve metric hovers slightly above 1.80 million Bitcoins, indicating a decrease in selling pressure. This diminished urge to sell could potentially give Bitcoin the opportunity to regain its lost ground from December and surpass the six-figure mark above $100,000 again.
Additionally, significant interest in Bitcoin (BTC) from larger entities such as MicroStrategy has driven up the demand for this cryptocurrency. As a result, some of the newly mined BTC and existing supply have been taken off exchanges by these large players. This sudden removal of BTC from exchanges (a supply shock) has been highlighted by BTC analyst Willy Woo.
Together, the current trend of low-level sellers and growing interest among large investors (often referred to as ‘whales’) could potentially support the ongoing growth in Bitcoin’s price. At the moment, Bitcoin stands at approximately $98,900, which represents a nearly 8% increase compared to its recent lows of $91,500.
This week’s Federal Open Market Committee (FOMC) Meeting Minutes, to be released on Wednesday, and US labor market reports due on Friday might increase price chart volatility. Given that the Fed’s December hawkish tone triggered a broad market sell-off, a similar tone in the Minutes could potentially lead to some selling.
But BTC trader Cryp Nuevo, expected the cryptocurrency to climb to the liquidity pool near $101K.
It’s uncertain if the recovery will persistently surge beyond $116,700 (given a dollar conversion). Following the release of US economic data this week, attention is likely to move towards President-elect Donald Trump’s inauguration on January 20th, which may influence market movements.
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2025-01-06 17:36