On-chain data shows that Bitcoin miners are once again on sale recently. According to some analysts, it is possible that this will cause the BTC price to drop.
Bitcoin miner reserve is falling, will BTC crash?
A CryptoQuant analyst says that the BTC miner reserve has witnessed exits recently. When the value of this metric rises, it means that Blockchain validators are currently transferring cryptocurrencies to their addresses. Such a trend could be a sign that miners are accumulating. Hence, it means a rise for the price of the asset.
On the other hand, the bearish indicator shows that miners are currently removing BTC from their wallets. Generally, these investors withdraw coins from their reserves for sale-related purposes. Therefore, such a trend would likely have bearish consequences for the value of the coin. In the context of the current discussion, it is not the miner reserve itself, but rather the “rate of change” (ROC) of interest. This metric tracks the percentage changes in miner reserve over a given period. Here, the relevant period is a 14-day period. Below is a chart showing the trend in the 14-day ROC of Bitcoin miner reserves over the past few months.
The value of the metric has been negative recently / Source: CryptoQuantAs you can see in the chart above, the 14-day ROC of the miner’s reserve was green last month, as Bitcoin surged above $30,000. These positive values of the indicator mean that the miner reserve is increasing rapidly. But in the first week of this month, the metric turned negative, implying that the miner’s reserve is starting to dwindle. It seems that miners have continued to withdraw coins from their wallets since then, as the value of the indicator remains red. The 14-day ROC of the miner’s reserve continues to be in the notable red lately. It’s possible that these Blockchain validators haven’t stopped selling yet.
Big Bitcoin move ahead: Up or down?
Glassnode, the on-cane data provider, drew attention to the current state of the Bitcoin market today. Accordingly, it pointed to a rather low volatility environment. The 20-day Bollinger Bands are experiencing extreme ‘squeeze’ with a price gap of only 4.2% separating the upper and lower bands. This indicates that Bitcoin is currently in a period of limited price action. He also points out that it is “the quietest Bitcoin market since the early January recession.”
20-day Bitcoin Bollinger Bands / Source: GlassnodeThe tightening of Bollinger Bands combined with declining trading volumes creates a scenario of increased pressure in the Bitcoin market. As the throughput decreases, the potential energy stored in this coiled spring intensifies. According to analysts at CryptoCon, the preferred scenario right now is the bullish scenario. Analysts said, “When Bitcoin volatility drops in a bear market, it is very bearish. “When volatility drops in a bull market, it’s insanely bullish,” he says. According to analysts, a strong move to the upside is possible as Bitcoin is at the start of a new bull market.
Bitcoin price is trading sideways, 1-day chart / Source: TradingViewThe code for BTC’s weekly price trends!
Bitcoin bulls were initially excited after the SEC-XRP situation was resolved. However, the price briefly rallied before returning to its previous levels. Currently, Bitcoin is trading at the same levels as before the rally. However, a deterioration from the existing structure is likely in the future. According to experts, this will also lead to a potential fix. The upcoming Fed pivot will play a crucial role in shaping the market. Therefore, investors should be prepared for a significant crash.
Recent developments show that institutional investors are increasing the buying pressure. This leads to speculation about the start of the next bull run. According to Cheeky Crypto, for the fourth consecutive week, Bitcoin has not been able to break beyond a certain resistance level. Despite testing the upper zone, the price struggled to break the supply zone above $31,848. If Bitcoin manages to reach higher price levels, such as $40,000, before the Fed’s pivot, it will provide some protection against the market’s next decline. On the other hand, if BTC experiences a reversal in the $20,000 to $21,000 range before the Fed pivot, it will test previous lows.
Bitcoin warning from the master analyst: The lights may go out!
The analyst, nicknamed DonAlt, says that despite positive developments for the market, the Bitcoin rally is nearing its end. The analyst notes that there is probably some weakness on the horizon for BTC. DonAlt noted the spot-based BTC exchange-traded fund (ETF) announcements, BlackRock CEO Larry Fink’s positive speech, and the U.S. Securities and Exchange Commission’s (SEC) opposition to Ripple if Bitcoin drops below $30,000. He states that he will ignore the positive decision in the case he has filed. In this context, the analyst continues his statement as follows:
…what can pump this rock? The bulls must take a big step here or I think $20,000 is not impossible.
DonAlt says that BTC needs to close above $33,000 to maintain its strength and have a chance to reach new highs. Otherwise, a close below the $29,500 mark will not bode well for the leading crypto. Based on this, the analyst shares the following assessment:
Let’s take a quick look at the market: I think the situation here is mixed, both bulls and bears have a chance. Closes below $29,500 will look bad. BTC needs to maintain its ETF momentum. It closes above $33,000 and we’re back in the all-time high range with the ETF tailwind. I’ll let the market figure this out before I get involved.
Source: DonAlt/Twitter
