Bitcoin Sees Selling Pressure From Miners, Long-term Holders As It Falls To $64K: Bitfinex

Last week saw a significant change in the dynamics of the crypto market. Bitcoin (BTC) lost more than 6 percent, and the US spot Bitcoin exchange-traded fund (ETF) broke its 20-day streak, bringing in hundreds of millions of dollars.

According to the latest Bitfinex Alpha report, the fall in Bitcoin was mainly caused by long-term holders, whales and miners trading and selling in over-the-counter transactions.

Selling pressure from LTHs and Wells

Long-term holders often sell off their holdings gradually during bull cycles, especially when the market is strengthening, which is the current level. This group of investors was responsible for most of the selling pressure last week, which outpaced spot ETFs.

The Hodler Net Position Change Index, which tracks the monthly position changes of long-term bitcoin investors, shows how severe the selling pressure is. When long-term owners sell, this indicator turns negative, and when they buy, it becomes positive. The indicator has been consistently negative for the past nine days.

In addition to long-term catches, whalers are busy. The ratio of the top ten exchanges to total revenue has increased, indicating that a large amount of BTC is being deposited in whale wallets on trading platforms, possibly in preparation for sale.

While the crypto market's sell-off is at a lower level than seen earlier in April, Bitfinex analysts said it highlights the influence of long-term holders on BTC market volatility. Additionally, it serves as a reminder that long-term holders and whales are still the largest group of bitcoin holders overall, outnumbering spot ETFs. Decisions of these investors can affect liquidity and price movements in critical market stages.

Mineral reserves are depleted

In addition, miner's BTC reserves fell sharply last week following a series of declines before Bitcoin halved.

“The peak in BTC around March 2024 corresponds to a significant decrease in mining, which miners sold their stock in order to get a higher price. This was common at that time, when miners sold their stock to prepare for Bitcoin halving to realize the investment needed to improve machinery and operations,” said Bitfinex.

Analysts speculate that miners are still struggling to maintain operating efficiencies as their block rewards decline. They are contributing to the current selling pressure and reserves have fallen to a four-year low.