A South Korea-based analytics platform has revealed that miner capitulation, stagnant stablecoin issuance, and significant outflows from major spot Bitcoin ETFs are the primary reasons behind the recent Bitcoin pullback.
The platform pointed out that in order for the price to recover, the selling pressure from miners and ETFs would need to decrease. Bitcoin (BTC) is currently experiencing a bearish trend, erasing Year-to-Date gains as the 30-day return dips into negative territory by 2%.
As of now, Bitcoin is trading at $65k, dropping by 3.5% in the past week. The analytics provider, CryptoQuant, highlighted that miners’ revenues have decreased by 55%, leading them to sell off their holdings to cover operational costs. This has resulted in a significant amount of BTC being sold off, with over 1,200 BTC sold by miners in the past two months.
Furthermore, the lack of new stablecoin issuances, particularly USDT and USDC, has contributed to the bearish market sentiment by indicating a decline in new capital inflow. Additionally, the substantial outflow of spot Bitcoin ETFs from asset managers like Fidelity and Grayscale has also played a significant role in the market pullback.
On June 17, spot Bitcoin ETFs recorded a net outflow of $145.9 million, with major outflows coming from Fidelity Wise Origin Bitcoin Fund and ARK 21Shares Bitcoin ETF. Contrary to these outflows, Bitwise Bitcoin ETF recorded an inflow of $2.9 million. In total, a net outflow of $580.6 million was recorded last week after four consecutive weeks of net inflows.
The combined impact of these factors has instilled fear among short-term investors, leading them to sell off their holdings to avoid potential losses. However, some analysts believe that the ongoing selling pressure is also driven by long-term holders who have been actively selling their holdings earlier this year.
Currently, the $62,400 price level has been identified as a strong support level for short-term investors based on previous market behavior. To trigger a recovery, selling pressure from miners and ETFs would need to decrease.
Keith Alan, co-founder of trading resource Material Indicators, noted that multiple moving averages have become a challenge after Bitcoin’s spot price slipped through them. Despite the current market conditions, he remains optimistic and sees opportunities to buy back at lower prices.