As the Bitcoin price is stuck in the $30,000 region, “miners are actively selling their Bitcoin reserves.” The CryptoQuant report says ‘this is not a random event’ and could lead to bottoms.
Miners liquidate their reserves: Bitcoin price prepares for bottom test
Crypto analytics firm CryptoQuant has warned that Bitcoin is facing renewed selling pressure as miners actively sell their BTC reserves. According to the report, miners have been draining their reserves since July 6. These sales push the balance into negative territory and put downward pressure on the market.
According to CryptoQuant, if the selling pressure from miners continues unabated, the Bitcoin price could potentially test the $27,000 to $25,000 range. This prediction is supported by the occurrence of a regular bearish divergence in the percent change histogram.
Short-term traders force price to stay in a tight range
In the report dated July 17, CryptoQuant said that the BTC price stuck in the $30,000 region has speculative roots. These investors have been selling since the Bitcoin price broke the critical resistance.
CryptoQuant contributor Axel Adler said, “This group is actively selling Bitcoin reserves. Thus, it creates a significant pressure on the market. This suggests that short-term investors are actively liquidating their holdings, thus locking in profits.” The investor group in question STHs are wallets that hold funds for six months or less.
For Adler, miners are gearing up for the next Bitcoin halving in 2024. This indicates another factor affecting price performance today. “Miners are actively selling their Bitcoin reserves,” Adler summarizes, adding:
This is not a random event; We saw the highest sales last year. This is linked to the upcoming halving event, where the Bitcoin mining reward has been cut in half. Miners need liquidity to invest in new equipment to stay competitive.
Bitcoin price is actually pretty stagnant
Bitcoin volatility remains at its lowest in terms of historical context. CryptoQuant reveals a clear slowdown in trading activity since April. This is because traders taking profits continue to wait for a more significant breakout.
Data from TradingView shows that the historical volatility index of Bitcoin is 14.77 as of July 18. This is well below its 2023 peak.
“All these factors together make up the current picture of the Bitcoin market where the price seems to be ‘stuck’ within a narrow range,” Adler says. “However, as always with cryptocurrencies, changes can happen very quickly. For this reason, investors should closely monitor on-chain metrics to be aware of market changes,” he adds.
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