The month of June has been a challenging one for Bitcoin and its investors, as the cryptocurrency has experienced significant price declines. One of the main reasons behind these price drops has been the sell-off by Bitcoin miners, who have reportedly sold over 30,000 BTC ($2 billion) at an alarming rate. This wave of sell-offs has been prompted by the recent halving event, which has reduced miners’ rewards and tightened their profit margins.
The halving event saw miners’ rewards halve from 6.25 BTC to 3.125 BTC, affecting their revenue and profitability. In addition, Bitcoin’s lackluster price action since hitting a new all-time high in March has also played a role in miners prioritizing their immediate financial stability over hoping for further price appreciation. As a result, miners have been offloading a significant amount of their holdings to cover operational costs, putting additional selling pressure on Bitcoin.
Crypto analyst Willy Woo highlighted the impact of these sell-offs on Bitcoin, stating that the cryptocurrency will only recover once the “weak miners die and hash rate recovers.” This process involves inefficient miners going bankrupt while others upgrade to more efficient hardware. Once these miners have liquidated their holdings, BTC is expected to make an impressive recovery. However, in the short term, Bitcoin risks further declines and dropping below the key psychological level of $60,000 if selling pressure from miners continues.
Another factor contributing to Bitcoin’s potential further downtrend is the presence of a significant supply barrier formed by addresses that bought BTC between $64,300 and $70,800. Crypto analyst Ali Martinez pointed out that holders who bought in this range may offload their holdings to limit losses, putting additional downward pressure on Bitcoin. Additionally, Bitcoin recently dropped below the short-term holders’ realized profit of $66,200, indicating that further price declines could prompt these investors to cut their losses or secure any remaining profits.
In summary, Bitcoin’s recent price declines have been largely driven by sell-offs from miners looking to cover operational costs and prioritize financial stability amid reduced rewards and lackluster price action. While Bitcoin is expected to recover once miners have finished liquidating their holdings, the cryptocurrency faces risks of further declines in the short term due to selling pressure from miners and the presence of a significant supply barrier. Investors should closely monitor these developments to assess the potential impact on Bitcoin’s price in the coming days and weeks.
