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- Bitcoin miners increased the selling pressure on BTC as the halving approaches.
- Grayscale’s Bitcoin outflows continued to rise.
Bitcoins [BTC] The price remained at the $40,000 mark for quite some time after the correction. The prolonged stagnation led skeptics to anticipate a possible decline in BTC’s value. In the short term, miners can contribute to Bitcoin’s correction.
Miners play it safe
As Bitcoin’s long-awaited halving approached, a shift was observed in the Bitcoin mining sector.
Recent data indicated a substantial decline in miners’ Bitcoin reserves, accompanied by an increase in BTC transfers to exchanges. The flow of miners to exchanges exceeded exchanges to miners by a factor of three, indicating significant selling pressure from the mining community.
The rationale behind miners liquidating their reserves is strategic.
Typically, miners capitalize profits before a halving to cover operating costs and facilitate future investments. This strategy is becoming increasingly important as competition in Bitcoin mining escalates with each halving, with the block reward being halved, reducing the miners’ income unless the Bitcoin price rises proportionately.
To remain competitive, miners must invest in advanced, more efficient mining equipment and technologies. Liquidating some of their Bitcoin reserves will provide the capital needed for these strategic investments.
This trend is of paramount importance for investors and market analysts to keep an eye on as increased selling pressure from miners could impact the short-term price of the coin.
Miners are selling Bitcoin reserves before the halving – a strategic move
“In fact, the flow of #Bitcoin from miners to exchanges is now three times greater than the movement from exchanges to miners. This trend indicates strong selling pressure from the mining community.”
By means of…
— CryptoQuant.com (@cryptoquant_com) January 25, 2024
State of BTC
At the time of writing, BTC was trading at $39,907.84. The volume on which it was traded had dropped significantly from 31 billion to 18 billion.
Moreover, the number of BTC holders also decreased in recent days. These factors could play a major role in the future price decline of BTC.
Source: Santiment
In addition to the behavior of miners, the behavior of institutions can also influence the price of BTC.
Read Bitcoin’s [BTC] Price forecast 2024-25
According to recent data, Grayscale’s BTC spot ETF GBTC had net outflows of $394 million on January 25, with a single-day trading volume of $502 million.
Net outflows slowed slightly over three trading days, and at the time of writing, Grayscale ETF’s cumulative net outflows were $4.079 billion. At the time of writing, the company still had $20.028 billion in net assets.
