Bitcoin’s recent price turbulence can be largely attributed to a substantial selloff by miners, a phenomenon known as miner capitulation. On-chain data reveals a dramatic decline in the amount of BTC held by miners over the past three days, as they liquidated a staggering $1.71 billion worth of Bitcoin. This massive selloff comes at a precarious time for Bitcoin, which is struggling to regain momentum and break through the critical $60,000 price level.
Miners Dump Massive Amounts Of Bitcoin
According to crypto analyst Ali Martinez, Bitcoin miners offloaded approximately 30,000 BTC—valued at around $1.71 billion—within just 72 hours. This massive liquidation coincided with a sharp rise in mining difficulty. On September 11, Bitcoin’s mining difficulty surged to a new all-time high of 92.67 trillion, surpassing the previous record of 90.67 trillion set in July. As more miners join the network, the competition for rewards intensifies, driving up the difficulty.
Since Bitcoin’s last halving in April 2024, miner rewards have been effectively halved, squeezing profit margins. Many smaller and even some large-scale mining operations are now facing significant challenges. With the price of Bitcoin stagnating, miners have been forced to sell off their holdings to cover expenses and maintain operations.
A Concerning Drop in Bitcoin Held by Miners
Data from Santiment underscores the gravity of the situation. The total amount of BTC held by miners plummeted from 2.23 million BTC in late July to approximately 2.14 million BTC recently. This decline reflects the increased selling pressure exerted by miners as they grapple with reduced rewards and higher operational costs.
Is the Bitcoin Rally Over?
The surge in miner selloff could exert considerable downward pressure on Bitcoin’s price, complicating its efforts to rebound. Bitcoin has been in a correction phase for over two months, leading some market participants to question whether the rally is officially over. Despite these challenges, Bitcoin has maintained a strong support level around $50,000. The cryptocurrency is currently trading at $57,960, up by 2.4% in the past 24 hours.
Also Read: Goldman Sachs Analyst Predicts XRP’s Rise As Global Finance Solution – 3,400 TPS vs Bitcoin
While miner capitulation is a significant factor, it is not the sole determinant of Bitcoin’s rally trajectory. The potential for renewed institutional inflows could revitalize Bitcoin’s bullish momentum, pushing it beyond the $60,000 mark and possibly setting new all-time highs.
As Bitcoin navigates through this turbulent phase, the next few weeks will be crucial in determining whether the rally is merely on pause or has reached its end.
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.
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