Bitcoin (BTC) has experienced a 4.5% decrease in value over the past week, reaching a monthly low of $65,000. This drop in value can be attributed to a surge in selling activity from mining entities. According to a recent report by CryptoQuant analysts, Bitcoin mining entities have been transferring a higher volume of BTC to exchanges, reflecting a decline in their revenues due to lower transaction fees. On June 9, the hourly transfer of BTC from the btc.com mining pool to Binance hit a two-month high of over 3,000 BTC. The following day, miners sold at least 1,200 BTC via over-the-counter desks, marking their highest daily volume since late March.
Large Bitcoin mining companies, such as Marathon Digital based in the U.S., have also intensified their selling activity. Marathon Digital has sold 1,400 BTC in June, representing 8% of its total holdings, a significant increase from the 390 BTC sold in May. This trend of increased selling from Bitcoin miners has emerged as their revenues have dwindled following the halving event. Daily miner revenues have dropped to around $35 million, a 55% decrease from the peak of $78 million reached in March.
Despite the decline in revenues, the Bitcoin network’s hashrate has remained high, only decreasing by 4% since the halving in April. The high hashrate puts additional pressure on miners as they require more computing power, energy, and time to validate transactions and add blocks to the blockchain. This situation has led to miners being underpaid or even extremely underpaid, although they were adequately compensated at the time this analysis was conducted. The current hashrate stands at 599EH/s, slightly lower than the pre-halving rate of 622 EH/s.
CryptoQuant analysts suggest that a period of low miner revenues combined with a high hashrate often indicates price bottoms for Bitcoin. It remains to be seen how low BTC can potentially dip before experiencing a market rebound. As daily transaction fees decrease and median transaction fees remain low in USD terms, the pressure on miners to sell off their holdings continues to grow. The dynamic between mining activities and BTC value will be a critical factor to monitor in the coming weeks to gauge the direction of the cryptocurrency market.
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