Two consecutive months of Bitcoin miners selling should not set off alarms before ETF decision! Here’s what to expect:
As Bitcoin struggles to break the $44,000 threshold, miners are showing signs of impatience, leading to a significant decline in reserves. Nonetheless, our analysis suggests that continued selling may not have an impact on the Bitcoin price due to the bullish sentiment surrounding the upcoming ETF decision. This sentiment is supported by several applicants who start advertising with confidence.
Miner holdings reach 7-month low
Bitcoin holdings held by miners have plummeted to their lowest level since May after a series of withdrawals this week. This trend indicates increasing selling pressure as the BTC price failed to break the $44,000 mark after posting a gain of nearly 12% in December.
Miner holdings represent the quantity of coins stored in the wallet associated with the miner. This number decreases as coins are transferred to an exchange, which often serves as an indication of the likelihood of future sales.
Over the past two months, miners have been offloading their Bitcoin holdings with the price surging above $35,000, according to data from CryptoQuant. This upward movement, which followed a bearish phase of the market crash, prompted miners to liquidate their assets.
Since the end of October, miners have begun the process of balancing their accounts, which has intensified the gradual decline in reserves this month. Miners currently hold approximately 1.832 million BTC, which is down from the peak of 1.844 million BTC in October. According to a report by Coinpedia, miners liquidated 3,000 BTC worth $129 million in the last 24 hours, bringing reserves down to May levels.
Despite miners liquidating billions of dollars worth of assets, the price of Bitcoin has remained relatively stable, consistently hovering above $40,000. This stability is due to increased accumulation near price declines, driven by expectations of the SEC’s decision on cash ETF applications in January. Moreover, the surge in ETF advertising has strengthened holders’ buying confidence.
Bitcoin Aims for a Strong January
As the end of the year approaches, Bitcoin (BTC) remains in a solid position, holding its value well above the $40,000 support level after a significant period of consolidation for much of 2023. Coinglass’ analysis highlights BTC’s bullish trend in January. , has shown positive growth over the past four years, with only one deviation in 2022.
Bitcoin rose an impressive 39% in January this year, with an average January gain of 3.6%, according to Coinglass data. Given this trend, BTC could aim to turn the $45,000 level into a new support area and potentially reach $50,000.
Bitcoin’s key technical indicator, the Puell Multiple, has recently reached levels that served as significant resistance, particularly in 2012, 2016, and 2019. These levels have historically resulted in major reversals in the price of Bitcoin.
A high Puell multiple, as it is now, suggests Bitcoin is overbought and miners are selling large quantities at high prices, hinting at a potential price correction. However, since the Puell Multiple has fallen from a high of 2.35 to 1.49, this could indicate a future bounce opportunity for Bitcoin.