bitcoin (btc) Miner reserves have seen a steady decline over the past year in a rather worrying development. However, bitcoin has recorded multiple price rallies during this period, even breaking the $100,000 price zone. CryptoQuant analyst cryptoavails has provided insight into this divergent trend and points out the driving force behind the current bull market.
bitcoin miners dump 37 million btc amid selloff
in a<a target="_blank" href="https://cryptoquant.com/insights/quicktake/678a9a8fc09a2f3ea0fe49df-bitcoin-Miners-Reserves-Downward-Trend-and-Market-Impact” target=”_blank” rel=”noopener nofollow”> Quick post on x, cryptoavails shares that bitcoin miners' holdings have been declining since the second half of 2023, falling from 1.808 million btc to its current value of 1.808 million btc.
Generally, when miners' reserves increase, it indicates accumulation, which is interpreted as a bullish signal. On the other hand, a drop in mining holdings due to high operating costs or profit taking represents significant selling pressure that can lead to bearish sentiments.
However, amid the current dump by bitcoin miners, cryptoavails highlights that the leading cryptocurrency has recorded notable periodic price growth to a current value of around $103,000. The crypto analyst explains that this unusual behavior indicates that other market participants, that is, retail and institutional investors, have shown strong demand to absorb all the selling pressure from miners.
For example, bitcoin spot ETFs, introduced in January 2024, have proven to be monumental in btc price growth, with each increase in inflows coinciding with a price rally. According <a target="_blank" href="https://sosovalue.com/assets/etf/us-btc-spot” target=”_blank” rel=”noopener nofollow”>SoSoValue data, bitcoin spot ETFs currently have total net assets of $114.82 billion despite being on the market for just over a year, representing immense institutional demand for the leading cryptocurrency.
Interestingly, cryptoavails notes that a continued decline in miners' reserves would eventually result in lower selling pressure, likely due to less btc available to sell, thus contributing to greater potential for price gains in the future.
Will btc enter consolidation?
In other news, popular market analyst Rekt Capital has posited a price move necessary for bitcoin to maintain its current rally and avoid another consolidation. At the time of publishing, the top cryptocurrency is trading at $103,114 after a 2.10% increase in the last 24 hours. Meanwhile, its daily trading volume has increased by 16.95% and is valued at $65.8 billion.
Capital Law<a target="_blank" href="https://x.com/rektcapital/status/1880349995586711943″ target=”_blank” rel=”noopener nofollow”> states btc should record a daily close above its final resistance of $106,000, followed by a retest to confirm a price breakout and a new incoming all-time high. However, if btc fails to break through the specified resistance zone, the asset is expected to trade between $101,000 and $106,000 in the near term, thus forming a consolidation zone.
Featured image from Coinformania, Tradingview chart
