Bitcoin miners appear to have reduced the pace at which they were offloading tokens, indicating that some selling pressure on the token may have eased.
Bitcoin prices stabilized around $20,000 after tumbling as low as $17,922 last week. The token now appears to be treating $20,000 as a support level.
A bulk of this tumble was also driven by Bitcoin miners offloading their holdings. Data last week showed that miners moved a record amount of Bitcoin onto exchanges last week, which eventually resulted in more price declines.
But after a massive sale last week, selling pressure on the world’s largest cryptocurrency may be easing.
Bitcoin miners’ exchange flows drop sharply
Data from CryptoQuant shows that after peaking last week, flows from Bitcoin miners to exchanges have dropped sharply. This implies that for now, selling pressure from miners is likely to ease.
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After moving as much as 4,700 Bitcoin in a day last week, miners mobilized about 308 tokens on Monday.
This also coincided with a mild recovery in Bitcoin prices to back above $20,000.
Separate data from Glassnode shows that miner net flows have also fallen to a one-month low, indicating limited trading activity. Major miners may now be again adopting a hold strategy in the face of volatile prices.
Bitcoin miners have been consistently selling their holdings this year to maintain operations, as the profitability of mining was impacted by a drop in prices.
But other downside pressures remain
While reduced selling by major miners may offer Bitcoin some relief, the token still faces a slew of other headwinds.
Mass liquidations of major holders, such as Celsius and Three Arrows Capital, are bound to put more pressure on prices. Fears of another drop is also keeping most retail buyers out of the market.
The key factors that drove Bitcoin weakness this year- concerns over rising inflation and higher interest rates- are still in play, with no sign of easing.
Prolonged losses in the stock market are also spilling over into the token.
