Bitcoin Miners Increase Selling Activity As BTC Demand Growth Slows: CryptoQuant

CryptoQuant analysts have found that Bitcoin miners have increased their selling activity amid a slow growth in BTC demand over the past month.

According to the latest CryptoQuant weekly report, the decrease in demand for BTC is evident in the low demand for Bitcoin Well, fewer purchases from exchange-traded funds in the United States, and Coinbase's premium falling below zero.

Miners increase sales activity

Miners have sent huge amounts of BTC to different exchanges, creating an imbalance in the market. Since the halving was completed on April 19, miners' earnings have fallen sharply following a 50 percent reduction in block rewards.

Currently, mining entities are selling their holdings to cover operating costs; However, if the trend continues and the profitability of miners turns negative, the price of BTC may witness more pressure.

Due to the high mining activity, the supply of BTC exceeds the demand. Julio Moreno, head of research at CryptoQuant, stated yesterday that the total BTC balance on the over-the-counter (OTC) tables began to increase in mid-March when the crypto asset reached $73,000. OTC supply has been increasing since then, reaching its highest level since November 2022, but demand has slowed.

Demand for BTC will decrease

The monthly growth of BTC demand from permanent holders (investors who buy BTC and never sell) dropped 50% from 200,000 BTC at the end of March to 96,000 BTC. Analysts have pointed out that accelerating demand growth is necessary for prices to fall and eventually rise.

Growth in interest from large investors and Bitcoin wells has fallen to 6% from a peak of 12% at the end of March. Spot Bitcoin ETFs in the United States fell sharply from a mid-March high of $1 billion, with outflows and little inflows recorded.

Additionally, funding in the sustainable futures market fell to its lowest level this year, indicating that sell orders outnumbered buy orders, and traders are unwilling to pay as much to open long positions as before. Traders are opening more short positions in anticipation of further price declines.

With BTC hovering around the $60,000 lows for two months, the asset could reach $55,000 to $57,000 in the short term. This range is 10% below the current trader price of $63,000, a level that acts as support during a bull market.