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Bitcoin Price Rally at Risk at Miners Offload $8.2B BTC

Bitcoin miners enter $8.2b selling spree: $60k price rally at risk?

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Bitcoin’s price tumbled to a weekly low of $50,664 on Feb. 21, narrowly avoiding massive liquidations; on-chain data analysis pinpoints the likely causes of the recent pullbacks. 

After a remarkable 27% February uptick that saw Bitcoin (BTC) hit a 3-year peak of $52,985 on Feb. 20, Bitcoin is struggling to maintain momentum. 

With miners ramping up profit-taking ahead of the upcoming halving event, a decline in ETF inflows threatens to scuttle the BTC price rally. 

Bitcoin miners sold BTC worth $8.2 billion in previous 30 days

Bitcoin price dipped $50,664 on Feb. 21, sparking concerns of widespread liquidations as the bears looked to break below $50,000 for the first time since the Valentine’s Day rally. Market data shows the Bitcoin miners’ selling trend, and a slight blip in ETF inflows this week contributed to the pullback.

Bulls have managed to stage an instant rebound toward $51,500 at press time on Feb. 22, but a closer look at the on-chain data trail suggests the bull rally is not yet back on track. 

Cryptoquant’s miner reserves metric monitors real-time balances held by BTC miners. It shows that BTC validators hold a cumulative balance of 1,824,201 BTC as of Feb. 22, a 160,000 BTC decline from the balances held on Jan. 31. 

Bitcoin (BTC) miners cut reserves by 160,000 BTC (~$8.2 billion) between Jan. 31 to Feb. 22, 2024 | Source: CryptoQuant

Valued at about $51,500 per coin, the recently-traded 160,000 BTC are worth approximately $8.2 billion. Notably, the chart illustrates how the miners had intensified the selling frenzy by $102 million after BTC’s price hit a local peak of $52,858 on Feb. 15. 

Typically, a sell-off among miners indicates a bearish sentiment among a significant bloc of stakeholders. With approximately 10% of the total circulation supply in their custody, the BTC miners significantly influence Bitcoin price action. 

Without a commensurate demand surge, it is unsurprising that the latest wave of miners’ sell-off has coincided with Bitcoin prices tumbling to a weekly low. 

Bitcoin ETFs have not kept up last week’s demand

The BTC price rally in the first half of February was attributed to the Bitcoin ETF making record-breaking inflows. 

Ahead of the ETF’s weekly trading opening on Feb. 19, BTC hit a new 2024 peak in the early GMT hours as strategic investors looked to front-run potential gains if the ETFs pick up the buying trend from where they left off in the previous week. But that has not happened. 

Bitcoin ETFs dialed down their buying trend this week. Feb. 19 - Feb. 22
Bitcoin ETFs dialed down their buying trend this week. Feb. 19 – Feb. 22 | Source: TheBlock

For context, TheBlock’s ETF on-chain flow chart above shows historical changes in BTC balances held by Bitcoin ETF. 

Unlike last week’s 17,480 BTC accumulation, Bitcoin ETFs have slowed the buying trend by 73%, acquiring only 4,680 BTC between Feb. 19 and Feb. 22.

In summary, there has been a decline in ETF demand this week, while miners are intensifying their selling spree ahead of the halving. 

The two critical factors have been pivotal to BTC price tumbling towards $50,000 rather than breakout towards a new all-time high above $60,000 as the bulls anticipated, with the rapid accumulation ahead of the ETF trading hours on Feb. 19. 

Price forecast: Bitcoin can hold above $48,500 

Amid dwindling ETF demand and miner’s mounting selling frenzy, BTC price looks likely to hold above $48,500 if it loses the $50,000 psychological support level in the short term.

The Bollinger Band technical indicator further underscores this outlook by providing insights into potential support and resistance levels for Bitcoin’s short-term price movement. 

With the 20-day Simple Moving Average (SMA) price currently at $48,560, it is a crucial support level below the $50,000 threshold. 

This suggests that if the price were to drop below $50,000, the $48,560 level may act as a significant area of support, potentially halting further downward momentum.

Bitcoin (BTC) Price Forecast, February 2024
Bitcoin (BTC) Price Forecast, February 2024 |  Source: TradingView

If bullish momentum prevails and Bitcoin reclaims the $53,000 level, the upper Bollinger band indicates that the bears may emerge again, establishing a sell-wall at around $55,830. 

This signifies a key resistance level that could impede upward movement, potentially leading to a consolidation phase or a pullback.

Given these technical dynamics, strategic swing traders may consider setting short-term stop-loss orders around the $45,000 area to manage risk in case of a breakdown below the $48,560 support level. 

Conversely, bullish traders may target take-profit orders around the $55,000 mark, anticipating potential resistance near $55,830 and aiming to capitalize on any further upward movement.


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Written by BTC Artist

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