Bitcoin Price Declined after 5-Month High Miner Outflows
The price of Bitcoin (BTC) plummeted from $10,580 to $10, 258 on Coinbase on September 13. The 3% drop within nine hours occurred following an on-chain data signaled at a possible miner sell-off.
Within the entire past week, on-chain analysts explained that miners are selling relatively higher amounts of BTC.
Miners are part of the two unmatched sources of selling pressure in the cryptocurrency market, aside from exchanges. Thus, if miners move their mined Bitcoin, it could make an immense selling pressure to build.
In a report on September 3 regarding the transfer of BTC funds from major mining pools, the CEO of the analysis firm, Ki Young-Ju, stated, “As I know, some Chinese miners already realize their mining profitability (return on investment), and they might not want new mining competitors joining the industry because of the bull market.”
Aside from that, based on Glassnode, a metric shown that the inflow of capital from miners to exchanges just reached a five-month high. The last spike was on mod-August when Bitcoin price hits 2020 high of more than $12,000 – immediately followed by a correction toward $10,000.
Then, regular sell-offs let the miners cover expenses from maintaining large-scale mining centers.
Glassnode noted that BTC miners to exchange flow (1d MA) hit “a 5-month high of 50.351 BTC Previous 5-month high of 44.479 BTC was observed on 14 August 2020.”
In case Bitcoin recovers quickly from pullbacks led by miners, it means sufficient demand from retail investors on exchanges. On the other hand, if the BTC price further falls, it would indicate that the demand is not enough to absorb the selling pressure.
The Resistance Level
For the short-term, most traders became cautiously optimistic despite Bitcoin’s rejection at the $10,500 area.
Traders are saying that this major resistance level is unlikely to get breached at a first attempt. Then there is a possibility of a minor rejection given its historical importance.
A pseudonymous trader called Byzantine General said that the initial increase to $10,500 hit short contract liquidations. In the near term, the trader expects a rebound or a minor decline to $10,100.
He stated, “As usual, liquidity levels are where it’s at. Liqs get taken, price dumps. We just took some liqs again. I can see this going back up from here, otherwise it maybe dumps a bit further to 10100.”
Moreover, another prominent crypto trader, Scott Melker, noted that the $10,500 region was a major Bitcoin resistance. Looking at the significance of the resistance level, the trader explained that it is not likely to result in a major pullback.
He wrote, “Don’t expect a major resistance to be broken on the first test. Also, don’t expect the first rejection to lead an epic dump.”
Then, in his recent Bitcoin price technical analysis, trader Michael van de Poppe noted this level as a vital wall to break in the short term. However, they need to test and confirm previous resistance levels. That is for the bullish trend to continue as new support before moves higher.
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