Ever since Bitcoin price surged above $71,000 and the subsequent spot approval of the Ethereum ETF, market participants were confident that it would reach new all-time highs. Unfortunately, all expectations were changed by the rejection and the recent pullback confirmed a strong bearish trend. A large bearish candle overshadowed by buying pressure dragged BTC price out of the bullish range. Thus, it is now believed that the expected bottom below $60,000 may finally be reached.
With institutional investors seeing record inflows over the past few days, who is selling Bitcoin and creating selling pressure?
Bitcoin price has been stable in a range for over 100 days, which may have triggered a strong miner capitulation phase, which is rare. This is the result of a halving event that weeds out weaker miners. Additionally, the average cost of mining has skyrocketed to over $75,000 per BTC, while the spot price has fallen below $67,000. This may have therefore forced miners to reduce their balances, which are the lowest they have been in the past 6-8 months.
Bitcoin miner balances have been steadily declining, hitting multi-year lows as sell-offs intensified after the Bitcoin halving in April 2024, according to Glassnode data. Balances fell from 1.84 million BTC in early 2023 to 1.8 million BTC by May 2024, according to Glassnode data. The trend highlights the need for miners to cover operational costs as block rewards decline.
Therefore, we can say that Bitcoin miners played a key role in the recent BTC price correction. It is estimated that they sold more than 1,200 BTC (about $80 million), which is preventing the rally from crossing the key resistance at $71,800. Fortunately, this capitulation phase is nearing an end and a new bullish phase could begin. Still, the question remains whether Bitcoin (BTC) price could form a new ATH at $75,000.
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