Bitcoin miners continue to face the heat, but what is the way forward
- Bitcoin Miners Face the Heat as Selling Pressure Increases
- Daily activity and velocity are falling, but retail investors are showing faith
Bitcoin Miners were one of the sections of the crypto community that were massively affected by the crypto winter, thanks to the selling pressure. According to the founder of the Capriole Fund, Charles EdwardsThe increase in miners’ stress could also paint a negative outlook for the royal coin in the long term.
We see the third highest Bitcoin Miner sales of all time. The level of Bitcoin miner stress today is only triggered by 2 other occasions. The other 2 times? Bitcoin was only $290 and get this… $2.10! pic.twitter.com/tKmKiAh8jO
— Charles Edwards (@caprioleio) 30 November 2022
Read Bitcoins [BTC] Price prediction 2022-2023
A spike in miners’ pressure has always led to a price drop in the past. If the mining pressure continues to decrease, there is a possibility that BTC’s prices will fall further. Short sellers could thus make use of this opportunity.
Source: Twitter
The Miner’s Dilemma
One reason for the increasing selling pressure on miners may be the declining miners’ incomes. As can be seen from the image below, Bitcoin miner earnings have dropped significantly over the past two months.
This drop in revenue has forced miners to sell their BTC to make money. Bitcoin’s hashrate, on the other hand, continued to increase according to data provided by Messari.
A growing hashrate indicated that it would require more computational effort for miners to mine Bitcoin. Coupled with rising energy costs, it would be very difficult for miners to stay profitable under these conditions.
Source: Glassnode
Investors’ continued hope for Bitcoin
Despite these bearish signals, retail investors continued to show faith Bitcoin. According to data provided by Glassnode, the number of addresses has more than 0.1 Bitcoin hit an all-time high on December 1st. Along with that, the number of addresses holds more than 10 coins also hit a 22-month high.
📈 #Bitcoin $BTC Number of addresses with 0.1+ coins just hit an ATH of 4,096,393
Previous ATH of 4,096,121 was observed on November 30, 2022
See calculation: pic.twitter.com/hdzVvBYmY1
— glassnode alerts (@glassnodealerts) 1 December 2022
Unfortunately, large addresses with over a thousand coins were observed leave their positions.
When it comes to on-chain calculations, Bitcoin witnessed a decline in activity. Its daily active addresses have observed a decline in recent days. Along with that, Bitcoin’s speed also took a hit. Thus, it suggests that the frequency at which BTC was traded had dropped tremendously.
Source: Sentiment
It remains to be seen Bitcoin will succumb to the pressure and fall further in terms of price.
However, aAt the time of writing, the ratio between longs and shorts was 0.96, which suggests that there were more people shorting Bitcoin in the last 24 hours, according to Coinglass.
