Bitcoin's decline to $77,700 has miners facing increasing financial difficulties, prompting a significant increase in their transfers to crypto exchanges. Miner selling is increasing, according to blockchain data from CryptoQuant, as historical market patterns predict further price declines until strong buying from buyers stabilizes supply.
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Miners Sell BTC at Local Lows
When the price of Bitcoin dropped below $78K, the number of transfers from miners to crypto exchanges increased significantly. The market decline forces miners to sell their Bitcoin to cover operating costs, which leads to a further decline in the price of BTC. The green bars on the CryptoQuant chart reflect the significant activity of miners on exchanges during significant price crashes.
Previous price levels where miners actively sold their assets coincide with local market lows, according to the chart data. Long-term bearish trends occur when miners continue to get rid of their assets due to insufficient liquidity from buyers.
Why are miners increasing sales?
Miners' decisions to expand liquidation practices are influenced by various factors:
Operating costs
Mining operations require constant funding to cover both operating costs and the cost of electricity and equipment maintenance. A drop in the price of Bitcoin forces miners to sell additional coins to maintain their current operations.
The Impact of Market Liquidity
The imbalance between sales by miners and purchases by traders creates selling pressure, which leads to lower market prices.
Potential impact on the market
The strength of market demand may prevent distribution pressure from permanently affecting Bitcoin prices, possibly leading to a price recovery. BTC prices may continue to decline as miners hold onto current sales levels.
CryptoQuant data shows that recent price changes are driven by miner activity, confirming that on-chain metrics are key to predicting market conditions. Short-term market activity shows signs of volatility as miners may continue to test support levels before stabilizing their prices.
The market monitors the logic of Bitcoin transactions along with the supply trends on the exchange to determine the subsequent price dynamics, while miners contribute to the decrease in the current market value.
Source: cryptonews.net
