Bitcoin miners have sold $2 billion worth of bitcoin since June, the fastest sell-off in more than a year. The sharp drop in bitcoin miners' holdings to a 14-year low has sent shockwaves through the market and raised questions about the near-term direction of bitcoin prices.
There are many reasons for the massive selling of Bitcoin by miners, including the recent Bitcoin halving and a significant drop in profitability. Bitcoin miners are facing increasing selling pressure due to the increase in breakeven price after the halving. Despite some positive news in the Bitcoin space, such as Microstrategy buying nearly 12,000 BTC (about $786 million), Arthur Hayes' bullish macro outlook, and Michael Dell's endorsement of Bitcoin, price action remains weak, with Bitcoin trading as low as $63,000.
Miners’ wallets have shrunk significantly, with total reserves down 50,000 BTC from the beginning of the year. This massive sell-off reflects the financial pressures faced by miners. In addition, the market was also shaken by the recent sale of about 3,000 Bitcoin by the German government, with 47,000 Bitcoin reportedly still to be sold. A large amount of Bitcoin has flooded the market, adding downward pressure on prices.
In addition, the market is talking about $BTC prices being limited in the short term, but an explosive bullish trend is expected as the year-end approaches. The massive selling of call options with expiration dates of less than one month and the aggressive buying of September-December call options highlight the market's expectations of a summer consolidation followed by a sharp rise, which may be related to the US election.
$ETH remains the focus of bullish sentiment, with ETH volatility 18% higher than Bitcoin, driven by expectations of the upcoming launch of an ETH spot ETF. As ETH has been trending higher throughout the summer, traders are taking advantage of this bullish sentiment and monetizing the premium on ETH volatility to earn high returns.
One trading idea worth noting involves the ETH CFCC (Coupon Forward Contract), which provides a 55% annual coupon payment every Friday as long as the spot price remains above $3,500. The contract expires on September 13th with a strike price of $3,000 and a guaranteed amount of $2,500. If the spot price falls below $2,500 at expiration, the deployed USD will be converted into ETH at a price point of $3,000. We should treat the market rationally for all these factors that affect the market.
If you have any thoughts on this, please feel free to discuss in the comments section.
Disclaimer: The information provided is not trading advice.
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