Selling pressure on the Bitcoin market is increasing, and miners are fueling this in what is being described as a “strategic move.”According to analysts, savvy Bitcoin miners will probably Continue to increase asset sales to cover costs as the next halving approaches.
On January 26, on-chain analytics provider CryptoQuant reported that miners selling their Bitcoin reserves ahead of the halving is a strategic move that is likely to result in further selling pressure.
Bitcoin miners increase selling pressure
Analysts say “significant changes” are occurring in the Bitcoin mining field as the halving approaches.
On-chain data shows that the amount of Bitcoin reserves held by miners has decreased significantly. Additionally, BTC transfers to centralized exchanges are also on the rise. It argued that:
“In fact, the flow of Bitcoin from miners to exchanges is currently three times as large as the movement from exchanges to miners. This trend indicates strong selling pressure from the mining community.”
Miners typically lock in profits before a halving event to cover operating costs and prepare for future investments. According to CoinGecko, the halving is estimated to occur around April 22nd, 87 days later.
Additionally, the reward for mining a block is reduced to 3.125 coins, effectively reducing miners’ income unless the price of Bitcoin increases proportionately.
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Bitcoin miners must continually invest in more efficient equipment to stay ahead of the ever-increasing competition. Therefore, selling a portion of your BTC reserves will fund these expenses and investments. CryptoQaunt says:
“Increased selling pressure from miners could impact Bitcoin prices in the short term.”
Bitcoin miners currently have 1.83 million BTC in reserves, which is worth about $73.4 billion. It has continued to decline since the sell-off began in late October.
BTC collects $40,000
Selling pressure has also increased due to capital outflows from Grayscale, the industry’s largest crypto asset management company.
of Grayscale Bitcoin Trust has been sold Since spot ETFs were approved in the US on January 11th, there are approximately 106,575 BTC.
Additionally, the US government plans to auction more than 2,930 BTC (worth about $130 million) seized during the Silk Road incident.
Nevertheless, Bitcoin price regained the psychological $40,000 level during Friday morning trading hours in Asia.
The asset was trading at $40,120 at the time of writing after a small daily gain. However, the stock has fallen 13% in the past two weeks, and the short-term outlook is bearish.