Bitcoin (BTC) has risen sharply in recent days. It has even climbed back above the important $48,000 mark. An analysis by crypto analytics firm CryptoQuant shows that at the same time, selling pressure from Bitcoin miners has decreased, even as transaction costs have fallen significantly. Does this mean we can continue to ascend?
Miners reduce BTC selling pressure
Selling pressure from Bitcoin miners is a crucial factor in market dynamics and will remain remarkably low through 2024. According to CryptoQuant’s latest weekly report, miners are currently selling about 300 BTC per day, a significant decrease from 800 BTC in November and December 2023. This decline comes at a time when Bitcoin mining profitability is experiencing its largest annual loss has suffered, prompting the largest publicly traded mining companies to replenish their BTC holdings.
The decline in Bitcoin transactions, which contributes to the decline in transaction fees, is due to lower activity in Bitcoin Ordinals and BRC20 tokens. Additionally, the number of transactions using Taproot addresses for inscriptions and BRC20 tokens has decreased by 76% since December, resulting in a significant reduction in daily Bitcoin transaction fees. Of course, this is not good for miners, who actually benefit from high transaction costs. According to CryptoQuant, this is why miners now prefer to hold on to their BTC instead of selling it. And that, in turn, can have a large – positive – impact on the price of BTC.
BTC demand recovery
In addition to the reduction in selling pressure from miners, the downward pressure on BTC price has also decreased. The BTC price has risen by several thousand dollars in the last few days and even briefly exceeded the $48,000 mark on Friday.
As miners’ selling pressure subsides, the recovery in demand for Bitcoin offers an interesting prospect for future developments. Especially in view of the upcoming halving, which almost guarantees fireworks. It will be an exciting few months for crypto investors.