Less than 48 hours ago, Bitcoin price was trading at over $9,700. Today, it hit under $9,200 at the low on Coinbase.
Data shows that the selloff was preceded by a massive outflow from miners to cryptocurrency exchanges. If miners were indeed behind selling down the recent rally, why aren’t they holding post-halving as expected?
Bitcoin Miners Sell Recent BTCUSD Rally Down To Nothing
Bitcoin is at a crossroads, after months of consolidation and sideways trading. Nearly every crypto market participant is watching and waiting, expecting a major move to arrive soon.
At the start of the week, following Sunday’s night’s weekly close, the first-ever cryptocurrency began to pump. The asset rose over $500 and 5% intraday before a rejection happened.
As of moments ago, the entire rally was erased and then some. Starting at 2 AM ET, Bitcoin price plummeted by $400 and 4%.
Thus far, support at $9,200 is holding, but if more selling picks up, a deeper drop is possible.
According to data, the selloff may have been Bitcoin miners taking advantage of higher prices, selling down the rally. Outflows of BTC potentially being sent to cryptocurrency exchanges were spotted late last night ahead of the selloff starting.
The outflow was the second largest since the rejection above $10,000.
Big spike in miner's outflows overnight.
Second biggest since #Bitcoin hit $10k.
I'm expecting a whole lot of selling, starting real soon. pic.twitter.com/RfYfYijZ8P
— Cole Garner (@ColeGarnerBTC) June 23, 2020
Moments later, the fall began. It’s not clear, however, if the supply moved has been exhausted, or if another round of selling is coming. What also isn’t clear, is why miners are selling Bitcoin in such large sums, when the expectation was they would hold post-halving.
Why Are Miners Dumping BTC When They Are Supposed To Be Holding?
If miners were indeed responsible as outflow data suggests, then why are Bitcoin miners selling off their BTC holdings after each pump?
The now past block reward halving was long anticipated to cause miners to hold their BTC supply ahead of a markup phase. A post-halving selloff driven by miner capitulation was also expected, however, neither scenario has happened.
Instead, Bitcoin has traded sideways, with buyers eagerly buying up any selloffs caused by miner sell pressure. Neither side has been able to cause a break in the trading range, but one will eventually give. A massive, over 20% move is expected when the breakout finally happens.
The sideways price action could be equilibrium taking place as miner sell pressure dries and buying pressure picks up. When miners eventually run out of supply, the increase in genuine bullish momentum could cause a breakout of downtrend resistance.
With the halving behind us, miners out of supply and holding, a new long term uptrend in Bitcoin could finally begin.