Recently, the price of bitcoin (btc) has entered a consolidation phase, fluctuating between $61,000 and $62,000 after a brief drop to $58,000 on June 24. While retail investors have shown renewed interest along with their institutional counterparts, the market is facing a combination of bullish signals and possible headwinds.
Retail investors are returning to bitcoin
In a recent x.com/ali_charts/status/1808147616578130284″ target=”_blank” rel=”nofollow”>social media postCryptocurrency analyst Ali Martinez highlights the resurgence of retail investors, as evidenced by a four-month high in new btc addresses reaching 432,026, adding to the sentiment that investors are betting on a significant increase in btc price in the coming months, despite recent price volatility.
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In one part x.com/ali_charts/status/1808040596747022843″ target=”_blank” rel=”nofollow”>mail Analyzing btc’s recent price action, Martinez also suggested that the market’s largest cryptocurrency is currently confined within a parallel channel, with a potential bounce to $63,200 or $63,800 if the lower boundary of $62,500 holds.
In particular, Martinez x.com/ali_charts/status/1808092251760849400″ target=”_blank” rel=”nofollow”>appointment critical resistance areas of $65,795 and $78,700 as key targets if btc breaks above them.
However, not all the news is positive for the bitcoin market. Over the past 72 hours, btc miners have x.com/ali_charts/status/1808025726198899046″ target=”_blank” rel=”nofollow”>sold more than 2,300 btc worth around $145 million. This selling pressure comes on top of the ongoing sell-off of confiscated btc by the US and German governments.
The mining industry under pressure
The mining industry is facing challenges due to lower network fees and reduced block rewards as a result of the Halving event in April.
Kaiko's research bitcoin-miners-fee-decline-seen-raising-risk-of-forced-selling-kaiko-says” target=”_blank” rel=”nofollow”>grades Average network fees have decreased from $3 to $5, a significant drop from $45 in January. The halving reduced block rewards from 6.25 btc to 3.125 btc, impacting miner revenue.
This reduction in revenue has put pressure on miners, eroding profitability while fixed expenses such as power, salaries and rent remain constant. Declining network fees have further contributed to the reduction in revenue.
Historically, bitcoin price increases following halving events have helped miners offset the drop in rewards. However, the bitcoin price has remained relatively unchanged since April 19. software update.
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In April, fees briefly rose to nearly $150 due to increased minting of non-fungible tokens (nft) on the btc blockchain. While this temporarily provided relief to miners, fees have since returned to average levels.
According to Bloomberg, Marathon Digital, one of the largest bitcoin miners, sold 390 btc in May and plans to sell more tokens to manage its finances.
Kaiko Research warns that the risk of forced selling by miners may persist in the coming months. As a result, the industry is expected to witness consolidation as miners look to “consolidate assets” and “increase efficiency.”
Notable examples include the “hostile takeover attempt” of Bitfarms Ltd. by mining company Riot Blockchain and CleanSpark Inc.'s recent deal to acquire Griid Infrastructure Inc. for $155 million in a all-stock transaction.
At the time of writing, bitcoin continues to consolidate within its range at $61,880, down 2% on the 24-hour time frame, erasing all gains from the past 30 days as losses on this time frame amount to 9%.
Featured image of DALL-E, chart from TradingView.com
