According to CryptoQuant data, miners are selling large amounts of bitcoin (BTC). Historically, the increased pressure from miners has been a local event and has led to sharp and long-term adjustments.
Why are miners selling bitcoins?
In May 2020, analyst Willie Wu said that after the bonus is cut by two, there will be two sources of unprecedented selling pressure in the market.
Wu found that bitcoin miners and cryptocurrency exchanges sell the commissions they earn from cryptocurrencies as sources of pressure from sellers. He said:
“There are two unprecedented sales pressures in the marketplace. (1) miners dilute the supply and sell on the market, this is a tax hidden by monetary inflation. And (2) stock exchanges that tax traders and sell on the market. ”
In the short to medium term, miners can continue to act as the main source of pressure to sell Bitcoin.
According to CryptoQuant data, the Miners Center Index (MPI) has risen sharply in recent days.
On January 10, MPI hit a level similar to July 2019, when the BTC price quickly dropped below $ 14,000. Ki Yong Joo, CEO of CryptoQuant, said:
“The miner’s position indicator seems to be enough to create a local peak. They sell BTC dollars. I will knock out a small number of cards against BTC dollars in this short term bear market. They have been selling bitcoins since last December. in US dollars, but the correction was minimal due to strong purchases of the company. ”
Key later noticed that he briefly covered his scalp and confirmed that the patch was short-lived.
Demand from US buyers could be the main pressure from mining companies. This theory is supported by the recent trend towards higher premium bitcoin trading on Coinbase when compared to other major exchanges like Binance.
What do short-term traders expect?
Some traders expect Bitcoin to see a bigger drop in the short term. Cryptocurrency trader Edward Moura said the likely scenario would be a slow correction to around $ 36,000.
Mora suggested that Bitcoin’s fall to $ 36,000 is unlikely, but it will be a “typical bull market.” He wrote:
“I think this scenario is unlikely, but I see some similarities to last week’s move from Sunday to Monday. Incidentally, it is difficult to hit the lowest level during the week on Monday and then widen, which is a typical bullish trend. market “.
Philip Swift, creator of LookIntoBitcoin, said that while Bitcoin is unlikely to see a 30% decline, the growth rate could drop. This could lead to a slowdown for BTC, especially since it is testing the $ 42,000 resistance level for the foreseeable future. This is for explanation:
“Clarification as there seems to be some misinterpretation. I don’t think that $ BTC is about to collapse + 30%, I think / I think that price increases may slow down in the short term. “