Market indicators revealed that the bulls were still ahead of the bears. However, the selling pressure on BTC was increasing, which could cause problems.
Bitcoin [BTC] miners are sending record amounts of BTC to exchanges. As exchange entry increases, the chances of BTC witnessing a price correction increase.
The latest from Glassnode’s tweet revealed that BTC miners increased selling pressure on the coin. According to the tweet, BTC miners #are currently recording extremely high Exchange interaction, sending an ATH of $128M to Exchanges, equivalent to 315% of their daily revenue.”
Historically, such episodes were followed by a price correction in the value of the king of cryptocurrencies. Therefore, is BTC expecting another price crash in the next few days?
As miners continued to sell their holdings, the BTC supply distribution turned bearish. According to Santiment’s chart, the supply of BTC on exchanges was getting closer to its supply off exchanges. If the former changes the latter, it would mean that the sell sentiment is dominant in the market, which may cause the BTC price to decline in the following days.
Bulls Continue to Lead
A look at the daily chart for BTC revealed that the bulls were ahead of the bears. This was evident on its exponential moving average (EMA) tape, as the 20-day EMA was well above the 55 day EMA. BTC’s MACD also complemented the EMA ribbons as it was bullish.
However, Bitcoin’s money flow index (MFI) was in an overbought position, which may cause investors to panic and encourage them to sell their holdings. On top of that, the Relative Strength Index (RSI) turned lower and headed south. This suggested that the possibility of BTC price plummeting cannot yet be ruled out.
Are the Miners to Blame?
Miners are entities that use great computing power to solve sophisticated encryptions and produce blocks on the Bitcoin Blockchain. Each block rewards miners with 6.25 BTC, who usually sell that amount to finance or expand their facilities.
On Tuesday, analytics firm CryptoQuant tweeted that more than 33,860 BTC have been sent to derivatives exchanges, though most had been recovered back to proprietary wallets.
Miners also reduced their reserves by 8,000 BTC, of which only a small part was sent to spot trading exchanges, the firm added.
“This could indicate that miners may be using their newly created coins as collateral in derivatives trading activities,” CryptoQuant analysts stated. “An example of this type of trading is known as ‘hedging,’ which uses bets in the opposite direction of market consensus.”
CryptoQuant data revealed that miners were still selling moderate amounts of BTC, which was evident in the BTC Miners Position Index (MPI). BTC’s Puell Multiple – a metric that looks at the supply side of the Bitcoin economy, such as Bitcoin miners, and their income – noted that miner revenue was in a moderate range, compared to its one-year average.
However, miners are not the only culprits, and investors in general were also selling BTC at a profit, as suggested by the aSORP network.
Additionally, net deposits on exchanges were also high compared to the past seven days, further proving that the coin was under immense selling pressure.
In the last 24 hours, the price of BTC decreased marginally. Most recently, it was trading at $30,338.28, with a market capitalization of over $589 billion.
By Audy Castaneda
