Ordinals, BRC-20 Tokens, and Miners Offloading BTC: Why is Bitcoin Down

Bitcoin has recovered slightly over the weekend, but remains capped at a relative seasonal low of $27,360. What is behind the recent recession?

According to crypto market analysis firm CryptoQuant, downward price pressure may be coming from the two metals.

Miners unload their bags

in mail From BaroVirtual on Saturday, the analyst noted that miners have significantly reduced their holdings since May 5, with the net change in mine position turning negative on May 9. Miners pool or sell their newly mined coins.

The chart shows that miners massively hoarded bitcoin from mid-March through mid-April, after which a wave of selling pressure helped push the asset from over $30,000 to under $27,300 in the space of three days.

Selling pressure has remained almost constant through today, peaking in Bitcoin drop to a multi-month low of $26,260 on Friday.

BRC-20 fee hike

Prior to Bitcoin’s drop last week, miners were having a field day at the new revenue generated from the new hype surrounding Ordinals and BRC-20, which brings Ethereum-like utility (NFTs and tokenization) to Bitcoin.

phenomenon also Drove Bitcoin fees are very similar to those for Ethereum, averaging $30 per transaction on May 8. This fee went directly into the pockets of the miners, providing a huge reward on top of the 6.25 BTC they normally earn per block.

The net position for miners briefly turned positive during the BRC-20 hype days, but quickly turned negative as fees returned to normal. Fortunately for the bulls, CryptoQuant has reason to believe that the sell-off will end soon.

“Currently, the net miner’s position values ​​are in the area where Bitcoin has rebounded in previous times, and the local bullish trend has continued,” BaroVirtual explained. “In this regard, it can be assumed that miners can significantly reduce their pressure, i.e. slow down sales or cancel sales when bitcoin reaches the $24,000 target.”

in interview Last month, CryptoQuant analysts said Potato encryption Bitcoin’s value could return to its previous all-time high of $69,000 by early next year, as institutions buy in late 2023.