Bitcoin’s rally could resume in the near future amid a decline in the selling pressure from Bitcoin miners, crypto market intelligence firm CryptoQuant observed in a recent report.
BTC Miner Selling Pressure Finally Dries Up
As explained by a CryptoQuant analyst, one main group in particular has been a source of major sell-side pressure in the market recently: the Bitcoin miners. After the Bitcoin network’s fourth halving event in April, mining rewards were reduced by 50%, so mining profits declined significantly. As a result, miners started selling Bitcoin via professional over-the-counter (OTC) desks to cover operational costs.
The halving, which slashed block rewards to 3.125 BTC from 6.25, rendered older mining machines less cost-effective, leading to a decline in mining activity and forcing miners to offload BTC to sustain operations — subsequently putting pressure on the market.
After the halving, Bitcoin miners were initially able to offset the loss in block rewards with the unprecedented surge in transaction fees following the launch of Casey Rodarmor’s Runes protocol.
However, the boost from Runes proved short-lived, with even large U.S. publicly traded Bitcoin mining companies seeing record-low profitability post-halving. Case in point, Marathon Digital sold over 1,380 BTC as of June 10, compared to only 380 BTC in May. Moreover, miner reserves — the amount of BTC held in miner treasuries — have registered net outflows in recent days.
But now, CryptoQuant’s data indicates a dramatic decrease in the amount of Bitcoin being transferred from miners’ wallets. This means miners are holding on to their reserves despite profits from Bitcoin network fees having declined, as they anticipate further rises in July.
This could be a positive thing for Bitcoin, seen as a catalyst for Bitcoin prices to float higher. The world’s largest and oldest cryptocurrency has historically gone on a parabolic rise after miner outflows slowed.
“In other words, the selling pressure of miners is weakening, and if all of their selling volume is absorbed, a situation may be created where the upward rally can continue again. Positive movements in the cryptocurrency market can be expected in the third quarter of 2024,” CryptoQuant concluded.
Meanwhile, U.S.-based spot Bitcoin ETFs recorded net inflows of nearly $12 million on June 27, extending the positive streak to three days. The renewed inflows came as global asset manager VanEck filed for a spot Solana ETF in the United States, signaling growing institutional interest in a wider range of cryptocurrencies.
