Bitcoin(BTC) is currently stuck in neutral after a recent price drop. This downturn follows a massive selloff by major Bitcoin holders (whales) and miners, totaling over $4 billion. Despite the significant selling pressure, crypto analysts remain optimistic about Bitcoin’s future price movement.
Whales and Miners Cash Out, But for How Long?
On-chain data analysis revealed that Bitcoin whales offloaded more than 50,000 BTC in the days leading up to the correction, valued at roughly $3.3 billion. These whales are known to significantly influence market prices with their large trades. Additionally, Bitcoin miners, who secure the network and earn BTC as rewards, sold over 1,200 BTC, worth approximately $79 million, to cover operational expenses.
Bullish Outlook Persists Despite Short-Term Sell-Off
While these selloffs caused a price decline, many analysts believe the bull market for Bitcoin is far from over. Ki Young Ju, CEO of CryptoQuant, highlighted that the average price at which most Bitcoin traders bought in is around $47,000. He argues that in a bull market, the price typically stays above this entry point. Even with a recent 9% drop from its peak of $71,500, Bitcoin could still be considered in a bull run, according to Ju. He advises investors to maintain a long-term bullish perspective but to manage risks cautiously.
Mining Costs and Price: A Bullish Indicator?
Crypto analyst Ali Martinez points to another bullish factor: Bitcoin’s average mining cost currently sits at $86,668. Historically, Bitcoin’s price has always surpassed its average mining cost. This trend is linked to the Bitcoin halving events, which cut the block rewards earned by miners in half, reducing the new Bitcoin entering circulation. While this reduces miner income, it can also drive the price up due to scarcity.
Martinez believes that Bitcoin will soon climb above this average mining cost, incentivizing miners to hold onto their rewards instead of selling them. This could significantly reduce selling pressure and lead to a price increase.
What Now for Bitcoin?
The recent selloff suggests short-term profit-taking by whales and operational cost management by miners. However, the overall sentiment amongst analysts leans positive. If Bitcoin surpasses its average mining cost, it could trigger a significant price surge as miners withhold their BTC from the market.
As of June 17th, Bitcoin is trading slightly down at $66,004.88 with a market capitalization of $1.30 trillion. While the price remains stagnant, the 24-hour trading volume has surged by nearly 40%, indicating continued investor activity. Despite a slight dip due to more long liquidations than shorts, buying pressure from shorts prevented a steeper decline.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
About The Author
