Bitcoin (BTC) Miners In Trouble: Sell Pressure Continues

Bitcoin (BTC) might be steadily rising, but Bitcoin miners appear to be under immense selling pressure and still dumping coins post-halving.

Bitcoin (BTC) price action appears bearish despite last week’s recovery from multi-week lows. Key on-chain metrics suggest that miners are facing immense selling pressure, which could be limiting any attempt at higher highs.

Moreover, a lack of demand from speculators and the German government’s sale of 2,738 BTC are adding selling pressure. However, spot Bitcoin ETF issuers, such as Grayscale, BlackRock, and Fidelity, are notably buying.

Bitcoin price finds itself in a precarious position. After last week’s deep losses, which forced the coin to multi-week lows and threatened critical support levels, the asset is recovering and showing signs of strength.

However, not all analysts are convinced. They prefer to look at on-chain developments, particularly the effects of miner capitulation, the German dump (at least in recent days), and how institutions are reacting to this, rather than price action and making bullish or bearish cases.

Thus far, the narrative on Bitcoin is bearish.

(BTCUSDT) price is retesting the resistance band in the $56,000 to $60,000 range, but buyers must demonstrate their strength further by closing decisively above the round number.

After April 20, when the network Halved miner rewards, miners will operate in a different regime. Not only will miners be receiving lower rewards, but they will also need to upgrade (i.e., commit more funds) to remain as efficient as possible.

According to one analysis, there is a brewing storm among Bitcoin miners. He went on to say that the declining hash rate, which is a measure of the computing power directed at the network and serves as a leading indicator, is a symptom of this disturbance.

The hash rate has been falling since April, peaking at 647 EH/s in late May and dropping to 552 EH/s in early July, according to Blockchain.com.

The analyst noted that this trend corresponds with a 2.5X decrease in miner revenue per block and is exacerbated by a 4X outflow, as indicated by exchange sales volume.

In essence, this suggests that miners are experiencing financial strain and are selling their output to alleviate the pressure. This creates strong selling pressure, which counters any attempt at higher highs.

Moreover, the analysis suggests that miners will face challenges in a rising-price scenario, indicating that bulls’ efforts will likely be hindered.

The analysis defines the true “bottom” as the point at which the massive supply influx is outpaced by demand.

Furthermore, the behavior of short-term holders (STHs), which primarily comprise retailers/speculators who purchased BTC within the last five months, raises concerns.

On-chain data suggests a complete lack of demand from this cohort. The absence of buying pressure may be attributed to market-wide pessimism or indicate further selling.

Both could be explained by the sell-off, which is being carried out by the Germany government and is putting pressure on BTC price.

Yesterday, they sold 2,738 BTC via exchanges and directly to market makers. On the buying side, as Germany sold, spot Bitcoin ETF issuers went on a buying spree.

According to SosoValue, Grayscale, BlackRock, and Fidelity all experienced significant inflows, which helped to restore sentiment and contain the sell-off.

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