Bitcoin (BTC) miners are facing intense heat with the growing cost of production with many now selling their BTC holdings.
Bitcoin Miner Revenue Slump: the Post-Halving Drawdown
Blockchain analytics platform CryptoQuant recently identified a significant uptick in mining pool transfers. This is in addition to a surge in Over-the-counter (OTC) desk sales.
#Bitcoin miners are under pressure and they’ve begun selling.
Let’s explore the recent uptick in mining pool transfers, the surge in OTC desk sales, and why even major publicly traded mining companies are reducing their holdings. 🧵👇
— CryptoQuant.com (@cryptoquant_com) June 13, 2024
Top crypto analyst, Ali Martinez on X linked this current market outlook to the Bitcoin halving event that went live in April. Precisely, Ali stated that the mining cost for the lead cryptocurrency grew significantly right after the halving. Currently, it cost an average of $77,000 to mine a single $BTC today.
“This spike in expenses has led to a wave of capitulation among #BTC miners in the past month,” Ali Charts mentioned.
These Bitcoin miners have ramped up selling as the price of Bitcoin fluctuates between $69,000 to $71,000. At the time of this writing, BTC was trading at $66,618.03 with a drop of 4.39% in the last 24 hours. A few days ago, transfers from mining pools to Binance surged to the point that it hit a 2-month peak of over 3,000 BTC. This shift is in alignment with a price correction that dropped Bitcoin to $66,000.
The situation is the same on OTC desks as the platform also saw a surge in sales. On Monday, miners sold 1,200 Bitcoin through OTC desks, marking the highest daily volume in over two months. Several United States Bitcoin companies have been busy offloading their Bitcoin holdings.
With June just two weeks gone, Marathon Digital Holdings Inc has offloaded 1,400 Bitcoins compared to May when it sold only 390 units. The sales represents 8% of its Bitcoin holdings.
Low Mining Revenue Triggers Selling Pressure
Miners are selling because of the negative turn that mining revenue took post-halving. In March, just around the time that Bitcoin hit its current all-time-high (ATH), miners revenue sat at $78 million. Today, this value has dropped by approximately 55% and is now at $35,000. This plunge in miners’ revenue is fueling the selling activity.
It is worth noting that Bitcoin transactions fees have also dropped reasonably to around 65 Bitcoin from 117 prior to April 18.
There are several expectations that Bitcoin could reach $100,000 by the end of June, however the selling pressure may impact negatively on the price in the short-term. With time, it is expected that the market would balance out with more liquidity.
At this point, BTC could head for its bull run if the demand from spot Bitcoin ETF issuers remains intact.
Read More: FINMA Orders Closure of Crypto Bank FlowBank, Begins Liquidation
The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.
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