As Bitcoin struggles to break the $44,000 threshold, miners are showing signs of impatience, leading to a significant reduction in their reserves. Despite this, our analysis suggests that the continuous selling might not affect Bitcoin’s price due to the bullish sentiment surrounding the upcoming ETF decision. This sentiment is supported by several applicants who are confidently launching their commercials.
Miner Reserve Touches 7-Month Low
The reserves of Bitcoin held by miners have plummeted to their lowest level since May, after a series of withdrawals this week. This trend indicates increasing selling pressure as BTC price failed to break the $44K mark after recording a gain of nearly 12% in December.
Miner reserves refer to the quantity of coins stored in wallets associated with miners. This number decreases when coins are transferred to exchanges, which often serves as an indication of potential upcoming sales.
Data from CryptoQuant indicates that over the past two months, miners have been offloading their Bitcoin holdings following a price surge above $35K. This upward movement, coming after a bearish phase post-market crash, has lured miners to liquidate their assets.
Starting from late October, miners initiated the process of balancing their accounts, leading to a gradual decrease in reserves that intensified this month. Currently, miners hold approximately 1.832 million BTC, a decline from the October peak of 1.844 million. As reported by Coinpedia, miners liquidated nearly 3000 BTC worth $129 million in the last 24 hours, plunging the reserves to May’s level.
Despite miners liquidating assets worth billions of dollars, the price of Bitcoin has remained relatively stable, consistently staying above the $40K mark. This stability is because of increased accumulation near price dips, supported by anticipation of the SEC’s decision on spot ETF applications in January. Furthermore, the surge in ETF advertising has strengthened buying confidence among holders.
Bitcoin Aims For A Bullish January
As we approach the end of the year, Bitcoin (BTC) is holding a robust position, maintaining its value well above the $40,000 support level after a significant period of consolidation throughout much of 2023. Analysis from Coinglass highlights a trend of bullish Januarys for BTC, with the past four years showing positive growth, except for a single deviation in 2022.
This January, Bitcoin saw an impressive 39% rise, and Coinglass data indicates an average January increase of 3.6%. Given these trends, it’s conceivable that BTC could convert the $45K level as a new support zone, potentially setting its sights on reaching $50K.
The Puell Multiple, a key technical indicator for Bitcoin, has recently hit levels that previously acted as significant resistance, notably in 2012, 2016, and 2019. These levels historically brought major reversals in Bitcoin’s price.
A high Puell Multiple, like the current one, suggests Bitcoin is overbought, with miners selling a large volume at high prices, hinting at a potential price correction. However, with the Puell Multiple having dropped from the peak of 2.35 to a lower 1.49, it could indicate upcoming rebound opportunities for Bitcoin.