Recently, Bitcoin (BTC) has experienced a substantial 4.5% decline in value over the past week, hitting a monthly low of $65,000. This significant drop in the price of the digital asset has been attributed to an upsurge in selling activities among mining entities. According to the latest CryptoQuant weekly report, the number of BTC sent from Bitcoin mining entities to exchanges has surged to a two-month high. This spike in selling can be linked to the decline in revenues for these mining entities due to reduced transaction fees.
High Selling Volumes from Bitcoin Miners
On June 9th, there was a notable increase in the hourly transfer of BTC from mining pools, such as btc.com, to popular crypto exchange Binance. The volume of BTC transferred hit a two-month high of over 3,000 BTC. The following day, miners proceeded to sell a minimum of 1,200 BTC through over-the-counter desks, marking the highest daily volume since late March. Major players in the Bitcoin mining industry like Marathon Digital based in the U.S. have significantly stepped up their selling activities. Marathon Digital has sold 1,400 BTC in June, accounting for 8% of its total holdings, a significant increase from the 390 BTC sold in May.
The increased selling pressure from Bitcoin miners can be attributed to a noticeable decrease in their revenues following the halving. Daily miner revenues have dropped to around $35 million, a stark 55% decline from the peak of $78 million reached in March. Additionally, daily Bitcoin transaction fees have plummeted to approximately 65, a significant decrease from the pre-halving level of 117. Despite the surge in the number of transactions on the network, median transaction fees have remained low in USD terms.
Despite the decline in revenues and selling pressure, the Bitcoin network’s hashrate has remained high, only falling by 4% since the halving in April. This high hashrate puts additional pressure on miners as it requires more computing power, energy, and time to verify transactions and add blocks to the chain. The current hashrate of Bitcoin stands at 599EH/s, slightly lower than the pre-halving rate. Miners are now competing for lower block rewards under high pressure, resulting in a challenging environment for them.
According to analysts at CryptoQuant, a period with low miner revenues and a high hashrate typically indicates price bottoms for Bitcoin. It remains to be seen how far BTC can decline before a market rally occurs. The impact of Bitcoin mining activities on the price of BTC is significant and underscores the interconnected nature of various factors influencing the cryptocurrency market.
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