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Recently, there have been several sales of BTC, especially via OTC by those who do mining, which have caused the price of Bitcoin to drop.
The market value of BTC began to decline on June 7, and this decline continued for more than two weeks, until the 24th of the same month.
Subsequently, Bitcoin moved sideways above $60,000 for about six days, then returned above $62,000.
Summary
OTC sales of mining: the price of Bitcoin drops
With the halving on April 20, the reward for miners has been halved.
Furthermore, the average fees have also decreased, from almost $20 the day before the halving to $2 at the end of May.
This dynamic has put several Bitcoin miners in difficulty, also because the difficulty in the meantime has only decreased by 5%. Therefore, in the face of a sharp drop in revenues, they have not been able to benefit from an equally strong drop in consumption.
At that point, in order to continue their mining activity sustainably, they had to dip into their savings and start selling BTC accumulated in previous months or years.
The recent report Bitfinex Alpha, published yesterday, reveals that Bitcoin miners have sold BTC both via OTC and on open markets. They were forced to do so to support their operations after the halving and the collapse of their revenues.
However, it also reveals that, in addition to this, the selling pressure has increased due to the liquidations by the German law enforcement and those expected from Mt. Gox.
The monetization of the holders
The analysts at Bitfinex also state that, according to the data in their possession, long-term BTC holders began to realize profits at prices higher than the maximum of the previous cycle ($69,000) during the second quarter of 2024. The problem is that they then resumed realizing profits even after, at a lower price and on a smaller scale.
They say:
“Although in a bull market profit-taking is expected, the extent of this activity raises concerns. If long-term holders continue to take profits at current levels (which we consider unlikely for an extended period), this could exert significant short-term downward pressure on the price of Bitcoin, potentially extending the current decline and impacting the medium-term bull market.
A decrease in miner sell-offs indicates a potential market stabilization. However, the high level of profit realization by long-term holders could pose the risk of further price decreases if the trend persists.”
So if on one hand the sales of the miners should have decreased, in the meantime those of the hilder have increased.
The trend of the price of Bitcoin
The result of such a dynamic is that Bitcoin has not been able to maintain the positive trend from the beginning of the year, and in recent weeks specific asset factors have added further headwinds to the prices of digital assets.
Due to this, the first semester ended with a whimper, and Bitcoin also decoupled from U.S. stocks during the month of June, precisely when long-term holders resumed selling, generating an excess supply that negatively impacted the market.
However, the price level reached on June 24 (just below $60,000) was perfectly in line with the bottom of mid-May, and higher than the bottom of early May, touched with the beginning of the post-halving decline.
To tell the truth, the post-halving decline started even before the halving itself occurred, as markets often anticipate events (especially predictable ones).
On April 8, the price was still above $72,000, and within less than ten days it had fallen below $62,000. That decline continued even after the halving on June 20, and ended on the first of May below $57,000.
Since then, however, the price of Bitcoin has not returned to this last figure, and it has always managed quite well to hold at least $60,000.
The OTC sales of mining farms and holders cause the price of Bitcoin to drop
The sales of miners likely concentrated in April and May, and decreased in June.
Partly because the difficulty during the month of May decreased, reducing costs for the miners, partly because they started to run out of BTC reserves to liquidate.
The stock titles of the main American mining companies listed on the stock exchange have marked a bottom in this phase between June 24 and 26, while the decline had started either at the end of April or after mid-May.
In other words, May was the most difficult month for the miner, while during the month of June the situation seems to have stabilized.
A different discourse, however, is related to the holders, who do not have real needs to sell, unless in specific cases.
From June 7 to 24, the selling pressure increased in the face of still low buying pressure, and this caused the price of BTC to drop from $70,000 to less than $60,000. However, this decline also seems to have halted for the moment.
It is therefore possible that the mass sales of miners and holders starting from this week have been significantly reduced, after a couple of abundant months in which they have dominated.