The Two Reasons Bitcoin’s Price Is Taking A Beating: Bitwise

The price of Bitcoin saw a sharp decline early this week, resulting in more than $300 million being liquidated into the cryptocurrency market in a single day. Why the sudden fluctuation?

Gayatri Chaudhary, quantitative research analyst at Bitwise, says there are two main drivers of the sell-off — neither of which are related to Bitcoin ETFs.

Miners get rid of

Analyst first male On Tuesday, activity of Bitcoin miners – a group “often overlooked” by market watchers – declined. Since the fourth Bitcoin halving in April, miners in the network have been constantly selling their Bitcoin amid much lower revenues and historically high competition from global rivals.

“On June 9, more than 3,000 bitcoins were transferred from mining pools to Binance, which represents a two-month peak,” Chaudhry said. Citing the CryptoQuant dashboard, the analyst noted that large sell-offs of this type tend to be associated with bearish price movement, as happened in mid-April right after the halving, or in late May.

CryptoQuant published a report earlier this month detailing the selloff, largely crediting Marathon Digital (MARA) — the largest publicly traded mining company. The company offloaded 1,400 BTC during the entire month of June, representing 8% of its total BTC holdings.

Both Bitwise and CryptoQuant also noted that miners sold 1,200 bitcoins via OTC desks on June 10 — their highest daily volume since March. As for regular exchanges, Choudhary said that more than $4.5 billion in assets moved from miner balances to exchanges in June.

Regarding the drivers of their sales, Chowdhury highlighted the miners’ tight profit margins since the halving. “Miners’ average revenue per terahash of energy invested in securing the network has fallen by 56% since the halving,” it said.

Jebel Jukes Fears

Adding to market concerns was an announcement on Monday from Mt.Gox confirming that it would finally repay long-lost bitcoins to its customers in July after ten years of dormancy. The exchange holds more than 141,000 Bitcoin worth more than $8.5 billion, spooking investors into anticipating a sudden wave of Bitcoin selling pressure.

“It may seem difficult right now, but remember that just a year ago, Bitcoin was trading at $30,000. A year before that? $10,000,” Choudhury concluded.

While the bearish impact of the Mt.Gox selling pressure has yet to be seen, crypto investors are currently looking forward to the launch of Ethereum ETFs in the US in the same month. Analysts at K33 Research believe ETFs will raise $4 billion in their first five months on the market.