The price of Bitcoin fell drastically towards the $60,000 mark in the days leading up to the just-completed halving. On-chain data has shed light on what could very well be the reason for this mid-market price drop excitement around the halving.
This is mainly evident from data some miners sold off their holdings in the days leading up to the halving, with miners’ entire BTC holdings hitting a 12-year low.
Miners’ Bitcoin holdings hit a 12-year low
On-chain analytics platform IntoTheBlock noticed this interesting trend among Bitcoin miners. According to the platform’s “Miners’ Bitcoin Holdings,” the collective BTC reserve of several miners has now fallen below 1.9 million BTC, the lowest in more than 12 years.
Interestingly, the metric shows that miner reserves have seen a sustained trend of outflows since the beginning of the year, just after the approval of Spot Bitcoin ETFs. This means that outflows from mining portfolios can be linked to increased demand from the various Bitcoin ETF portfolios, with the latter now controlling over 4.27% of total circulating portfolios.
As Bitcoin enters the halving, miners’ BTC holdings hit a 12-year low. This indicates that miners have been net sellers leading up to the halving. pic.twitter.com/WNi74RkluG
— IntoTheBlock (@intotheblock) April 19, 2024
At the time of writing, CryptoQuant data estimates the total number of miner reserves at 1.818 million BTC, down 22,000 BTC from 1.84 million on January 3. Furthermore, this outflow from miners’ reserves was exacerbated in the days leading up to the halving. , as noted by IntoTheBlock.
“This indicates that miners have been net sellers leading up to the halving,” IntoTheBlock said in a social media post.
Continued selling pressure from miners may have been a factor in Bitcoin’s stagnant pace between $65,000 and $70,000 in recent weeks. This outflow of BTC from mining wallets into the market appears to have flooded the market with more than enough BTC, which in turn contributed to a crash to $60,000 during the week.
Bitcoin is now trading at $64.906. Chart: TradingView
What’s next for Bitcoin?
The Practice of Bitcoin Miners sell their belongings in the days leading up to the halving is not unusual, as evidenced by their actions during previous halving events. At the time of writing, Bitcoin is trading at $64,978, up 8% after recovering to $60,000. The long awaited fourth Bitcoin halving is now completed and the industry looking forward to its effect in the next months.
The halving is ultimately a balancing act for miners. Although miners’ revenues have been cut in half, the reduced Bitcoin supply and potential price appreciation over time could help offset some of the losses. According to a reportBitcoin miners could sell up to $5 billion worth of BTC after the halving, with the cryptocurrency’s price potentially falling to $52,000.
Featured image from Pexels, chart from TradingView
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