Bitcoin is currently experiencing downward pressure as miners are offloading a significant amount of BTC, with 1,200 coins being sold. Analyst Willy Woo has cautioned that this selling pressure could potentially lead to a price drop to $62,500.
Woo has expressed concern that the recent actions by miners could result in a bearish trend for Bitcoin. When the supply of Bitcoin exceeds demand, it typically leads to a decrease in price. Miners often sell the coins they receive to cover operational costs, but they may also hold onto them in hopes of a price increase. However, when faced with financial challenges or a lack of optimism about price movements, miners tend to sell off their holdings.
Recent data from CryptoQuant’s Head of Research, Julio Moreno, shows that miners sold 1,200 BTC on Monday, marking the largest daily miner selling volume since March. This suggests that miners may be feeling pressure or bearish about the future of the digital asset.
These transactions are reportedly taking place over-the-counter (OTC) rather than on traditional crypto exchanges, indicating that miners are being discreet about their trades to minimize the immediate impact on Bitcoin prices. OTC data also reveals that Bitcoin OTC desk balances for miners have surged by 54,000 BTC, hitting a yearly high.
Analysts attribute this miner behavior to the recent Bitcoin halving event, which occurs every four years and cuts the rewards offered to miners in half. Historically, this has led to miners struggling to sustain their operations and exiting the market. While Bitcoin prices have typically rallied to new highs after halving events, the current lack of bullish momentum suggests that miners may be facing financial challenges, prompting the recent sell-off.
Considering these factors, Willy Woo warns that the increased supply of Bitcoin could lead to further bearish pressure, potentially dropping the price to the $62,500 support level.
Despite these concerns, Bitcoin is currently trading at $69,764 after a 4% increase in the last 24 hours, partially recovering from a 1.2% weekly loss. Investor interest in Bitcoin remains strong, as evidenced by the influx of funds into Bitcoin ETFs. Spot Bitcoin ETFs in the US reportedly acquired around 25,729 Bitcoin in the week ending June 7, equivalent to two months of mining supply and more than eight times the new BTC mined that week.
If this demand continues, the impact of miners selling their holdings may be minimal on Bitcoin prices.