- BTC’s price may drop like it did in May 2023.
- Miners were selling their holdings instead of selling it.
According to SignalQaunt, an author profile on CryptoQuant, Bitcoin [BTC] miners have started sending large volumes of coins to exchanges. Sending a high amount of BTC into exchanges has hardly a good impact on the price.
For instance, there was a similar situation in May 2023. During that time, the Bitcoin price fell from $29,000 to $26,000.
Source: CryptoQuant
With the scenario playing out again, the SignalQaunt handle noted that:
“We need to keep an eye on whether this surge in miner deposits is temporary or sustained for wise investment.”
BTC miners shed holdings
Bitcoin’s price over the last few days has been moving sideways. But with a possible plunge coming, the coin might shed a significant part of its value.
This potential was in contrast to the expectations of a price increase in the first part of January 2024.
AMBCrypto then considered the Miner Net Position Change. This metric considers the 30-day supply change held by miners.
At the time of writing, the Miner Net Position Change was in the negative area. Specifically, the number had decreased to -7174.44.
This decrease was confirmation that Bitcoin miners were selling off their holdings instead of accumulating as they did for most of October.
Source: Glassnode
Should the Miner Net Position Change continue to be in the red, then market players should expect the same for BTC. However, participants also need to know the outcome of the ETF filings, which are due soon and could affect BTC.
For some, an approval could send the Bitcoin price higher.
An opportunity presents itself regardless
There are, however, others who believe that the outcome would be a “sell the news” event. An assessment of the technical outlook showed that the Money Flow Index (MFI) was 35.60.
In the early hours of the 30th of December, the MFI was 18.50. This reading suggests that Bitcoin was oversold.
Hence, the higher trend displayed by the indicator at press time was evidence that sellers were exhausted. At the same time, the signal could also serve as a confirmation that the BTC price might jump back to $43,000.
But rising beyond the price could be challenging.
This was because the 12 and 26 EMAs had fallen into the negative region. If the EMA fails to follow the MACD’s rise to the green, then BTC’s momentum might trend downwards.
Source: TradingView
Furthermore, AMBCrypto looked at the Bitcoin Hash Ribbon. The Hash Ribbon is a market indicator that shows when Bitcoin has become too expensive to mine relative to the cost of mining.
How much are 1,10,100 BTCs worth today?
When the Hash Ribbon changes from a clear region to red, it indicates a danger zone. In this region, Bitcoin has the potential to capitulate. However, the metric was in the white region at press time.
Though BTC tends to correct at its press time value, long-term holders might find it profitable to buy Bitcoin before the market becomes overheated.
Source: Glassnode