As Bitcoin just recorded its first-ever weekly green candle, a Bloomberg report casts doubt on the viability of this recent upside rally. Indeed, the American newspaper revealed that Bitcoin miners moved $6.3 billion from their wallet to exchanges during the month of May.
If Bitcoin has lost almost 22% of its value over the past month, the technical rebound initiated at the beginning of June would suggest that it has bottomed out. Especially since the stock market continues with two weeks of increases. However, it is seen that the crypto fails to fully extricate itself from the $28,000-$31,000 range.
So, it would be better to wait for the price to cross above this margin, and even a retest of this long phase of lateralization between $33,000 and $42,000. In this sense, the Bloomberg report is valuable in that it warns the market of a possible miner sell-off during the month of June.
Bitcoin: largest transfer of funds since January
In the article published by Bloomberg, where the newspaper quotes Coin Metrics data compiled by Compass Mining, it is stated that miners transferred 195,663 BTC tokens to exchanges during the month of May. This is the largest transfer of funds to crypto exchanges since January 2022.
This leakage of BTC from wallets does not necessarily mean that miners will liquidate (sell for dollars or other tokens) their holdings. However, the financial situation that several crypto mining companies find themselves in would suggest that there might be some selling pressure on these misplaced bitcoins.
The newspaper took the example of Riot Blockchain Inc, a company that has just completed its 750 megawatt crypto mining farm in the United States. In its quest for expansion, Riot will necessarily need cash to buy the machines to be used in the mining process. Bloomberg also reports that small mining companies will also need cash to pay for machines they have been ordering for a few months.
The director of Compass Mining thinks that if crypto miners want to maintain their operations, they must necessarily sell their tokens. He precised :
“I think miners are just talking about the macro environment and it’s probably prudent to sell bitcoins at those levels to keep operations safe. »
Crypto miner revenue down 56%
In his 23rd” The Week On-Chain”, entitled: ” Miners Incomes under Stress”, Glassnode indicates a certain concern among miners, who see their income collapsing while production costs increase due to the inflationary context. That said, the latter would be between a rock and a hard place to maintain their operations without causing a Bitcoin crash.
By analyzing the metric “ Miner Net Position ChangeGlassnode points out that it would have an overall miner balance reduction of between 5,000 and 8,000 BTC for the month of May. The on-chain data research center reports that miner earnings have fallen by 56.7% in the past month.
In conclusion, Glassnode wrote:
“Miners appear to be under increasing pressure, with signs of shrinking balance sheets and recent expansion of operations expressing themselves in growing difficulty. This means that each coin is now more expensive to mine, while the USD reward continues to drop and may portend a potential miner capitulation cycle. »
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Are Bitcoin miners under pressure? – BeinCrypto France
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