Although bitcoin price continues to move above $17,000, miner capitulation remains the main reason behind the sluggish price action. Analysts expect BTC price to have a slow uptrend above 17,000 but is likely to face strong resistance at $18,000.
Miner capitulation restricts Bitcoin (BTC) price action
Bitcoin price witnessed massive price momentum after Federal Reserve Chair Jerome Powell announced a slowdown in rate hikes from December. BTC price breaks $16.5K level and hits $17,197 high. However, it remains under pressure due to miner capitulation.
The fall in bitcoin price in this long bear market and high mining costs are forcing miners to sell their bitcoin positions. Some even sell their mining rigs to cover the financial crisis.
Surrender of Bitcoin miners. Source: CryptoQuant
The short-term inflows and outflows of the on-chain data of the miners’ wallets indicate a high value of the outflows in November. This can result in a price drop or an increase in volatility. Miners sold over 6,000 BTC last week and 10,000 BTC this week. On-chain platforms confirmed that miner Poolin sold 10,050 bitcoin to crypto exchange Coinbene.
According to Glassnode data, miners’ BTC reserves have declined by 13,000 BTC over the past few months. It has now touched a 14-month low of 1,818,280,032 BTC. The last time a 14-month low was 1,818,778.794 was in October of last year. Additionally, Bitcoin’s hashrate continues to drop due to decreased mining activity.
Traders can use the Miner Selling Power research indicator as it compares overall miner performance divided by overall miner supply. Thus, it confirms whether miners are selling their positions.
BTC price may reach $18,000
According to on-chain Spent Output Profit Ratio (SOPR) data, short-term participants continue to sell losses with a SOPR less than 1. The lack of positive sentiment makes $18,000 a strong resistance level.
Bitcoin SOPR Analysis. Source: CryptoQuant
Moreover, crypto analyst Michael van de Poppe previously predicted that if it holds the $16.6K support level, bitcoin price could continue higher towards $18.3K. He also pointed out that the bitcoin price has reached the bottom of the previous bear market where the price generally starts to rise.
Varinder is a technical writer and editor, technology enthusiast, and analytical thinker. Fascinated by disruptive technologies, he has shared his knowledge of blockchain, cryptocurrencies, artificial intelligence and the Internet of Things. He has long been associated with the blockchain and cryptocurrency industry and is currently reporting on the latest updates and developments in the crypto industry.
The content presented may contain the personal opinion of the author and is subject to market conditions. Do your market research before investing in cryptocurrencies. The author or publication assumes no responsibility for your personal financial loss.
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