Bitcoins price dropped as much as 10% during early trading hours on Tuesday as bitcoin miners started selling a large amount of the cryptocurrency for the first time since October. There is not enough demand to absorb the additional coins on the market because institutions want an idea of how the new Biden Administration will view bitcoin and other cryptocurrencies.
At the press time, bitcoin was trading at $32,254.59, down 3.04% in the past 24 hours, according to CoinDesks BPI. The price went as low as nearly $30,000 after markets opened in the U.S. on Tuesday.
Bitcoin miners position index, a ratio of the number of bitcoin leaving all miners wallets to that numbers one-year moving average, reached an eight-year high last week and is still above 2.0, according to data from on-chain analytics firm CryptoQuant. Any value above 2.0 indicates that most miners are selling.
Miners appear to have been selling in order to meet some of their operational costs.
For the first time in a while, it appears miners sold some fairly substantial holdings to raise cash as we expected on a rally after October, Neil Van Huis, director of sales and institutional trading at Blockfills, told CoinDesk. With a need to allocate capital to more (and newer) mining rigs, taking bitcoin off of their balance sheet for cash at three or four times higher prices 30-60 days after the wet season ended in China was about the best scenario [miners] couldve asked for.
While miners continue selling bitcoin, it seems there arent enough buyers, especially from the institutional investors, to meet the sell side.
The Coinbase premium, the gap between Coinbases BTC/USD pair and Binances BTC/USDT pair involving the tether stablecoin, has not shown strong or consistent numbers above $50 after it went negative last week, according to data from CryptoQuant.
Coinbase premiumSource: CryptoQuant
When this metric g ...
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