Bitcoin (BTC) Miners Amplify Sales Amidst Slowing Demand: Insights from CryptoQuant

• Bitcoin miners have increased their selling activity in the last month due to slow demand growth for BTC.
• This decrease in demand is evident in low Bitcoin whale demand, fewer purchases from spot exchange-traded funds in the United States, and the Coinbase premium falling below zero.
• If the trend continues and miners’ profitability turns negative, the price of BTC may witness more pressure.

Bitcoin miners ramp up selling activity amid slow BTC demand growth, potentially putting more pressure on BTC prices.

Miners Increase Selling Activity

Since the halving was completed on April 19, miners have sent a large amount of BTC to spot exchanges, creating an imbalance in the market. Their revenue has decreased significantly following the reduction of block rewards by 50%. Currently, mining entities are selling their holdings to cover operational costs. If this trend continues and miners’ profitability turns negative, the price of BTC may witness more pressure.

High Miner Selling Activity Outpaces Demand

Due to the high miner selling activity, BTC supply is outpacing demand. CryptoQuant head of research Julio Moreno revealed that the total balance of BTC at over-the-counter (OTC) desks started to increase when the crypto asset peaked at $73,000 in mid-March. OTC supply has remained on the rise since then, hitting its highest level since November 2022, but demand has slowed.

Demand for BTC Slows Down

The monthly growth of BTC demand from permanent holders has plummeted 50% from 200,000 BTC in late March to 96,000 BTC at the time of writing. Demand growth from large investors and Bitcoin whales has also fallen from a peak of 12% in late March to 6% currently. Spot Bitcoin ETFs in the U.S. have recently recorded significant outflows and little to no inflows, falling significantly from a mid-March peak of $1 billion.

Traders Anticipate Further Price Declines

The funding rate in the perpetual futures market has fallen to its lowest level this year, indicating that selling orders are outpacing buy orders, and traders are not willing to pay as much as before to open long positions. Traders are also opening more short positions in anticipation of further price declines. With BTC hovering around two-month low levels of $60,000, the asset may target $55,000 to $57,000 in the short term.

Conclusion

As Bitcoin miners increase their selling activity amid slowing BTC demand, the market could see more pressure on BTC prices. The current scenario indicates a potential short-term target of $55,000 to $57,000 for BTC, which is 10% below traders’ current cost basis of $63,000, a level which acts as a support during bull markets.