Bitcoin (BTC) miner reserves have seen a steady decline over the past year in a somewhat worrying development. However, Bitcoin recorded multiple price hikes during this period and even broke through the $100,000 price zone. cryptoavails provided CryptoQuant analyst some insights into this divergent trend that identifies the driving force behind the current bull market.
Bitcoin miners dump 37 million bitcoins amid selling spree
In a Quick share on X, Cryptoavails shares noted that Bitcoin miner holdings have declined since the second half of 2023, falling from 1.808 million BTC to its current value of 1.808 million BTC.
Generally, when miners’ reserves rise, it indicates accumulation which is interpreted as a bullish signal. On the other hand, a decline in miner holdings due to higher operating costs or profit taking represents significant selling pressure that can lead to bearish sentiment.
However, amid the ongoing dumping by Bitcoin miners, Cryptoavails highlights that the leading cryptocurrency has registered notable cyclical price growth as it has risen to the current value of around $103,000. The cryptocurrency analyst explains that this unusual behavior indicates that other market participants, namely individual and institutional investors, have shown a strong demand to eliminate all selling pressure from miners.
For example, spot Bitcoin ETFs, introduced in January 2024, have proven to have a massive impact on Bitcoin price growth with every increase in inflows ceding to price increases. according to Data from SoSoValue, Bitcoin Spot ETFs currently boast total net assets of $114.82 billion despite being on the market for barely over a year, representing massive institutional demand for the leading cryptocurrency.
Interestingly, cryptoavails notes that the continued decline in miner reserves will eventually lead to a decline in selling pressure, likely due to less BTC being available for sale, contributing to the potential for future price gains.
BTC to enter consolidation?
In other news, popular market analyst Rekt Capital posited price action is necessary for Bitcoin to maintain its current rally and avoid another consolidation. At press time, the flagship cryptocurrency is trading at $103,114 after a 2.10% increase over the past 24 hours. Meanwhile, daily trading volume rose by 16.95% to $65.8 billion.
Richt Capital Countries BTC should record a daily close above the final resistance at $106,000, followed by a retest to confirm a price breakout and a new all-time high. However, if BTC fails to cross the identified resistance zone, the asset is expected to trade between $101,000 – $106,000 in the short term thus forming a consolidation zone.
Featured image from Coinformania, chart from Tradingview