Bitcoin Miners’ Selling Pressure Remains Low Amid Decline in Transaction Fees
A recent on-chain analysis by market intelligence platform CryptoQuant has revealed that Bitcoin miners are experiencing reduced selling pressure despite a significant drop in transaction fees. The report states that miners are currently selling around 300 BTC per day, a significant decrease from the 800 BTC daily sales observed in November and December 2023.
Bitcoin Miner Selling Pressure Stays Low in 2024
In 2024, Bitcoin miner selling pressure has remained low as major publicly traded mining firms increase their BTC holdings. This coincides with a decrease in miner profitability, which is at its lowest point in over a year. CryptoQuant analysts note that these firms have been underpaid due to fewer transactions on the Bitcoin network. The number of daily Bitcoin transactions has dropped to a three-month low of 278,000, down from December’s peak of 731,000.
Decline in Bitcoin Transactions
The decline in Bitcoin transactions can be attributed to reduced activity from Ordinals inscriptions and BRC20 tokens. This is evident in the significant drop in transactions using taproot addresses, which have fallen by 76% since December. Analysts state that this decline in transaction activity has led to a 90% decrease in daily Bitcoin fees, from 560 to 53.
BTC Investors Demand Recovers
Despite the decrease in miner selling pressure, downward pressure on BTC’s price has diminished as it approaches the cost basis of short-term holders and traders. Additionally, the BTC price premium on Coinbase suggests that demand from U.S. Bitcoin investors has slightly recovered. However, buyers in derivative markets have not gained enough control to sustain a substantial price rally, as sell orders continue to dominate. Despite this, BTC’s price has seen an increase in the past few days, reaching nearly $48,000 on Friday.
It is important to note that CryptoQuant’s analysis contradicts a recent report from Bitfinex, which attributed the latest price drop in BTC to a selling spree among Bitcoin miners. Bitfinex suggested that miners are offloading their BTC reserves to raise capital and upgrade infrastructure ahead of the upcoming Bitcoin halving event.
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