This month of June has been to forget bitcoin and its investors, and the flagship cryptocurrency saw significant price drops. A recent event shows that bitcoin miners were largely responsible for these price drops with a wave of liquidations by them.
bitcoin miners are selling at an alarming rate
IntoTheBlock Market Intelligence Platform revealed in an x (formerly twitter) x.com/intotheblock/status/1804545269008138479″ rel=”nofollow” target=”_blank”>mail that bitcoin miners have sold more than 30,000 btc ($2 billion). This is the fastest pace in over a year at which these miners have dumped their btc holdings. IntoTheBlock added that this wave of liquidations has been caused by the recent halving eventwhich has reduced the profit margins of these miners.
The latter halving event Miners' rewards were halved from 6.25 btc to 3.125 btc, which ultimately affected their income and profitability. bitcoin's tepid price action since hitting a new all-time high (ATH) in March hasn't helped either, as these miners appear to have prioritized their immediate financial stability rather than waiting for further bitcoin price appreciation.
This has caused these miners divest a significant amount of its holdings, especially to cover operating costs. However, btc has to bear the brunt of these miners' capitulation, seeing the flagship cryptocurrency decline from around $70,000 at the beginning of the month to below $63,000 at the time of writing.
crypto analyst Willy Woo also recently highlighted the importance of these massive bitcoin sales by miners. indicating that the flagship cryptocurrency will only recover once “weak miners dies and the hash rate recovers.” He explained that shaking the weak hand would mean that inefficient miners would go bankrupt, while other miners would be forced to upgrade their hardware to more efficient ones.
Whatever happens, the btc price is expected to make an impressive recovery once these miners liquidate their holdings. However, in the meantime, bitcoin risks falling further and falling below the psychological level of $60,000 if this massive selling pressure of the miners persists.
Another reason btc is at risk of further downtrend
Cryptographic analyst Ali Martínez recently mentioned that around 5.45 million addresses bought 3.03 million btc between $64,300 and $70,800. He added that that range forms a major supply barrier, and btc is at risk of a “steep correction.” Martinez stated that those holders who bought in that range may dump their holdings to limit their losses, which could further intensify the downward pressure on bitcoin.
Bitcoinist too recently reported that bitcoin had fallen below the short term holders realized gain of $66,200. This is significant as btc's failure to recover soon enough could force this category of investors to cut their losses or lock in what little profits they have left from their bitcoin investment.
Featured image created with Dall.E, chart from Tradingview.com
