Recently, the price of Bitcoin (BTC) has entered a consolidation phase, fluctuating between $61,000 and $62,000, after a brief decline to $58,000 on June 24. While retail investors alongside institutional counterparts have shown renewed interest, the market is facing a mix of bullish signs and possible headwinds.
Retail investors are returning to Bitcoin
In a recent one post on social mediaCrypto analyst Ali Martinez highlights the resurgence of retail investors as evidenced by the highest number of new BTC addresses in four months reaching 432,026, adding to the sentiment that investors are betting on a significant price increase for BTC in the coming months, despite recent price increases. inconstancy.
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In a separate one after Analyzing BTC’s recent price action, Martinez also suggested that the market’s largest cryptocurrency is currently confined to a parallel channel, with a potential recovery to $63,200 or $63,800 if the $62,500 lower bound holds.
Particularly Martinez quotes the critical resistance areas at $65,795 and $78,700 as key targets if BTC breaks above.
However, not all news is positive for the Bitcoin market. In the last 72 hours, BTC miners have done just that sold over 2,300 BTC worth approximately $145 million. This selling pressure is contributing to the ongoing sell-off of confiscated BTC by the US and German governments.
Mining under pressure
The mining sector is facing challenges due to lower network costs and reduced block rewards due to the Halving event in April.
Kaiko research notes that average network costs have fallen from $3 to $5, a significant drop from about $45 in January. The halving saw block rewards drop from 6.25 BTC to 3.125 BTC, impacting miners’ earnings.
This revenue contraction has put pressure on miners, eroding profitability, while fixed expenses such as energy, wages and rent remain constant. The decline in network rates has further contributed to the decline in revenues.
Historically, Bitcoin price increases after halving events have helped miners offset the decline in rewards. However, Bitcoin’s price has remained relatively unchanged since April 19 software update.
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In April, fees briefly rose to nearly $150 due to the increased number of coins non-fungible tokens (NFTs) on the BTC blockchain. While this temporarily relieved the miners, compensation has 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 could 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 miner Riot Blockchain’s “hostile takeover attempt” on Bitfarms Ltd. and CleanSpark Inc.’s recent agreement. to Griid Infrastructure Inc. to acquire for $155 million in one transaction on all shares.
At the time of writing it is BTC is still consolidating within its range of $61,880, down 2% in a 24-hour time frame, wiping out all the gains of the last 30 days as losses in this time frame amount to 9%.
Featured image of DALL-E, chart from TradingView.com