Bitcoin
Bitcoin Miners’ Selling Pressure Eases, Signaling Potential Market Rally
Recent data from CryptoQuant indicates a significant decrease in the selling pressure from Bitcoin miners, suggesting a potential upward trend for BTC and the broader market in the near future. This shift comes as the market digests the sell-off from miners who have been offloading Bitcoin to cover operational costs following the halving event.
- Bitcoin miners’ selling pressure has significantly decreased.
- The market is absorbing the reduced volume of selling, potentially setting the stage for a continued upward rally in Bitcoin prices.
- The Bitcoin halving event has led to decreased profitability for miners, causing them to sell off Bitcoin to sustain operations.
- Analysts are optimistic about the cryptocurrency market moving into the third quarter of 2024.
Impact of Bitcoin Halving on Miners
The Bitcoin halving, which cut mining rewards from 6.25 to 3.125 BTC, rendered older mining equipment less cost-effective. This led to a reduction in mining activity and an increase in the need for miners to sell Bitcoin to sustain operations. Large corporate mining operations, such as Marathon Digital, have also faced record-low profitability, leading to increased sell-offs.
Market Reaction to CPI Data
Following the release of April’s Consumer Price Index (CPI) data, Bitcoin saw an abrupt 7% spike in its price. The CPI increased by 0.3%, slightly less than expectations, leading to positive reactions from both traditional finance and the crypto market. Analysts are looking to see how mining will react to the 2024 halving event, which reduced miners’ incentives by 50%.
Advancements and Challenges in Bitcoin Mining
Block Inc., led by Jack Dorsey, plans to advance in its mining technology with the development of a 3nm mining chip. This improvement aims to enhance Bitcoin mining efficiency. However, US President Joe Biden’s proposed 30% excise tax on electricity used by miners has drawn criticism from the crypto community.
Positive Outlook for Q3 2024
CryptoQuant’s analysis points to a more optimistic outlook for the cryptocurrency market moving into the third quarter of 2024. The decreased selling pressure from miners is a crucial factor in this positive forecast. If the current absorption of sell-offs continues, it could bolster Bitcoin’s price and potentially trigger a broader market rally.
Wang Yang’s Perspective on Mining and Digital Assets
Wang Yang, Vice President of the Hong Kong University of Science and Technology, emphasized the strategic importance of cryptocurrency mining and digital assets. He criticized the notion of banning mining, highlighting the $4 billion in tax revenue generated for the United States. Yang suggested that Hong Kong should leverage state-owned enterprises to participate in mining to ensure risk control while benefiting from the industry’s economic contributions.