Bitcoin’s increased demand from corporate, institutional and retail investors have been powering the cryptocurrency’s recent booming surges. In the previous week, the world’s largest cryptocurrency by market capitalization exceeded its all-time high above 40,000. The price of Bitcoin currently seems to be sliding lower in price action, trading somewhere at $35,000 at the time of publication. The increased selling pressures from miners have mostly contributed to the cryptocurrency’s downward price action.
Bitcoin Miner Activity Suggesting Price Correction
BTC has been going through a turbulent phase since going below the $40,000 mark. At the time of publication, the cryptocurrency is trading just below $40,000, being down by over 5%. This marks a considerable decline from its recent highs of $41,500.
Unless BTC holds a strong support at $38,000, there might be a possibility for a continued selling pressure in the nearer term.
Crypto analysts are even speculating that the market performance of the cryptocurrency will mostly depend on whether the cryptocurrency can face resistance in the short term.
Meanwhile, Bitcoin miner activity suggests that miners are increasingly placing sell orders on the cryptocurrency which could eventually result in price correction.
Miners Selling Large Amounts of Bitcoin
Data from CryptoQuant suggests that miners are appearing to be selling large amounts of Bitcoin (BTC). Historically, such kind of increased selling pressure from miners have resulted to sharp and prolonged corrections. The increased selling pressures from miners will eventually lead to a downward trend in the short term.
The CEO of CryptoQuant, Ki Young Ju, stated:
“Miner Position Index looks enough to make a local top. They’re selling $BTC. I’m going to punt a small short to scalp $BTC in this short-term bearish market. Since December last year, they had been selling $BTC, but the correction was tiny due to institutional buying power.”
Miner Position Index looks enough to make a local top. They’re selling $BTC.
I’m going to punt a small short to scalp $BTC in this short-term bearish market.
— Ki Young Ju 주기영 (@ki_young_ju) January 10, 2021
Based on data from CryptoQuant, the Miner Position Index (MPI) has surged significantly in the past few days. On Jan. 10, the MPI reached a level that is on par with July 2019, when BTC price fell below $14,000.