Historical data shows that some miners started selling their Bitcoin (BTC) at the end of July, which resulted in increased selling pressure in the cryptocurrency market.
Finally, the dominant crypto fell steeply from mid-August, recording a 13% fall and since then BTC has struggled to retake the $12K mark.
According to CryptoQuant CEO Ki Young Ju, this selling pressure might not be enough to prevent a bull run. On-chain data analysis firms closely observe the movements of miners and whales because they hold significant amounts of BTC.
Willy Woo, an on-chain analyst, said that miners represent one of the two external sources of selling pressure for Bitcoin. He previously said:
“There’s only two unmatched sell pressures on the market. (1) Miners who dilute the supply and sell onto the market, this is the hidden tax via monetary inflation. And (2) the exchanges who tax the traders and sell onto the market.”
When miners start selling their holdings, which is mostly to cover expenses, it could trigger a correction in the crypto market.
The selling pressure of miners and whales noticeably has been attributed to the current crypto market slump but in the longer term, Ki explained it is not enough to stop a prolonged bull run.
Selling a large amount of Bitcoin by miners could cause a severe correction as a small price movement could trigger liquidations from heavily-leveraged traders. So even a relatively small sell-off by miners could theoretically cause massive price swings.
Ki says the intensity of the sell-off from miners was not strong enough to stop bull runs. He said:
“Miner Update: Some miners began selling at the end of July, but I think in the long-run, miners didn’t sell BTC large enough to stop the next bull-run.”
According to ByteTree, the net inventory of Bitcoin miners declined by 125 BTC per week in the last year. The data shows that miners sold about $1.362 million BTC per week atop the BTC that they mined and sold.
As Ki said, the data indicates that miners sold large amounts of BTC, but not in amounts that were irregular to normal behavior.
Post-halving bull cycle remains a possibility
Bitcoin is still struggling above the critical $10,000 support level despite multiple attempts by bears to drop the price below the key level.
The resilience of Bitcoin amidst a heightened level of selling pressure shows a cautiously bullish trend in the long-term future.
Several on-chain metrics also show that right now is a healthy accumulation phase for Bitcoin. Rafael Schultze-Kraft, the CTO at Glassnode, said:
“Short-Term Holder Net Unrealized Profit/Loss (STH-NUPL) with a #bullish signal here imo. That bounce of the 0-line was important, is very characteristic for previous bull markets, and historically a good buying opportunity.