A South Korea-based analytics platform has revealed that miner capitulation, stagnant stablecoin issuance, and significant outflows from major spot Bitcoin ETFs are the primary reasons behind the recent Bitcoin price decline.
The platform suggests that in order for the price to recover, the selling pressure from miners and ETFs needs to decrease. Bitcoin (BTC) continues on a downward trend as selling pressure erodes Year-to-Date gains, pushing the 30-day return into negative territory by 2%.
As of the latest update, Bitcoin is trading at $65k, experiencing a 3.5% decline in the past week. The unexpected market pullback has been attributed to miner capitulation, stagnant stablecoin issuance, and substantial outflows from major spot Bitcoin ETFs by a South Korea-based on-chain analytics provider, CryptoQuant.
According to CryptoQuant, miners’ revenues have fallen by 55%, leading them to sell off their holdings to cover operational costs. Recent data reveals that over 1,200 BTC was sold by miners, the highest amount in two months.
Furthermore, the lack of new stablecoin issuances, especially USDT and USDC, has contributed to the bearish market conditions. Additionally, the significant outflow of spot Bitcoin ETFs from asset managers like Fidelity and Grayscale has also played a role in the market pullback.
On June 17, spot Bitcoin ETFs recorded a net outflow of $145.9 million, with major outflows from Fidelity Wise Origin Bitcoin Fund and ARK 21Shares Bitcoin ETF. However, Bitwise Bitcoin ETF saw an inflow of $2.9 million. Overall, there was a net outflow of $580.6 million last week after four weeks of consecutive net inflows.
The combined impact of these factors has instilled fear among short-term investors, leading them to sell off their holdings to avoid potential losses. This contrasts with analyst Willy Woo’s view, who attributed the selling pressure to long-term holders earlier this year.
Short-term investors are now looking at the $62,400 price level as a strong support based on historical data. To trigger a recovery, selling pressure needs to decrease from miners and ETFs.
In response to these developments, co-founder of trading resource Material Indicators, Keith Alan, mentioned that multiple moving averages have now become a challenge after the spot price slipped through them. He shared his experience of setting a trailing stop loss to protect profits in case of a market downturn, expressing optimism for a potential buyback at a lower price.
In conclusion, the current market conditions suggest that a reduction in selling pressure from miners and ETFs is crucial for Bitcoin to bounce back.