- The price of BTC could fall like it did in May 2023.
- The miners sold their shares instead of selling them.
According to SignalQaunt, an author profile on CryptoQuant, Bitcoin [BTC] Miners have started sending large amounts of coins to exchanges. Sending a large amount of BTC to exchanges hardly has a good impact on the price.
For example, a similar situation occurred in May 2023. During this period, the Bitcoin price fell from $29,000 to $26,000.
Source: CryptoQuant
As the scenario played out again, the SignalQaunt handle noted the following:
“We need to keep an eye on whether this increase in mining reserves is temporary or permanent for meaningful investment.”
BTC miners dump their holdings
Bitcoin price has been moving sideways over the past few days. But if a possible crash is imminent, the coin could lose a significant portion of its value.
This potential was in contrast to expectations of a price increase in the first half of January 2024.
AMBCrypto then took into account the change in miner net position. This metric takes into account the 30-day change in miners’ supply.
At the time of writing, the Miner Net Position Change was in negative territory. Specifically, the number had fallen to -7174.44.
This drop was confirmation that Bitcoin miners were selling their holdings rather than accumulating them as they did throughout most of October.
Source: Glassnode
If the miner net position change remains negative, market participants should expect the same for BTC. However, participants also need to know the outcome of the ETF filings that are due soon and could impact BTC.
For some, approval could send the price of Bitcoin higher.
There is still an opportunity
However, there are others who believe the result would be a “sell the news” event. An assessment of the technical outlook showed the Money Flow Index (MFI) at 35.60.
In the early hours of December 30, the MFI was at 18.50. This reading suggests that Bitcoin was oversold.
Therefore, the higher trend that the indicator was showing at press time was evidence that sellers were exhausted. At the same time, the signal could also serve as confirmation that the BTC price could rise back to $43,000.
However, going beyond price could be a challenge.
This was because the 12 and 26 EMAs had fallen into negative territory. If the EMA fails to follow MACD's rise into the green, BTC's momentum could trend downwards.
Source: TradingView
Additionally, AMBCrypto took a look at the Bitcoin Hash Ribbon. The Hash Ribbon is a market indicator that shows when mining Bitcoin has become too expensive relative to the cost of mining.
How much is 1,10,100 BTC worth today?
When the hash ribbon changes from a clear area to a red area, it indicates a danger zone. There is potential for Bitcoin to capitulate in this region. However, at the time of going to print, the figure was in the white zone.
Although BTC tends to correct at its value at the time of publication, it could be profitable for long-term holders to buy Bitcoin before the market overheats.
Source: Glassnode
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