In the days prior to the Bitcoin halving event, the cryptocurrency’s price experienced a significant drop, nearing the $60,000 level. Insights from on-chain analysis may provide an explanation for this unexpected price decrease amidst the hype surrounding the halving.
Specifically, mining data shows that certain miners have been offloading their Bitcoins prior to the halving, resulting in a 12-year low for the total Bitcoin held by miners.
Miners’ Bitcoin Holdings Hit 12-Year Low
According to the on-chain analytics company IntoTheBlock, the amount of Bitcoin held by miners collectively has decreased to a level below 1.9 million BTC for the first time in more than 12 years.
It’s intriguing to note that mining reserves have been consistently decreasing since the start of the year, following the approval of Spot Bitcoin ETFs. This implies that the outflow from miner wallets may be attributed to heightened demand from Bitcoin ETFs, which currently manage over 4.27% of all circulating wallets.
During Bitcoin’s approaching halving event, the amount of Bitcoins held by miners has reached a 12-year low. This finding suggests that miners have been offloading more Bitcoin than they’ve been mining in the time leading up to the halving.
— IntoTheBlock (@intotheblock) April 19, 2024
Currently, according to CryptoQuant’s latest data, there are approximately 1.818 million BTC held in miner reserves. This represents a decrease of around 22,000 BTC compared to the 1.84 million BTC reported on January 3. The reduction in miner reserves was particularly noticeable in the days preceding the Bitcoin halving, as highlighted by IntoTheBlock.
“According to IntoTheBlock’s recent social media update, this suggests that miners have been offloading more cryptocurrency than they were mining before the halving event took place.”
Miners’ relentless selling could be one reason Bitcoin struggled to advance beyond the $65,000 to $70,000 range recently. This massive release of Bitcoin from miner wallets into the market may have oversupplied it, leading to a price drop down to $60,000 during the week.
What’s Next For Bitcoin?
Bitcoins miners often sell their recently mined coins before a halving event, as seen in past occurrences. Currently, Bitcoin is priced at $64,978, representing an 8% increase since it bounced back from $60,000. The highly anticipated fourth Bitcoin halving has now taken place, and the industry eagerly anticipates its consequences over the upcoming months.
Mining Bitcoin after the halving involves a delicate adjustment for miners. While their earnings are significantly reduced due to the reward cut in half, the decreased supply of Bitcoin and potential price surge could help mitigate losses in the long run. A recent study suggests that miners might sell as much as $5 billion in Bitcoin following the event, which could lead to a Bitcoin price dip to approximately $52,000.
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2024-04-21 16:16