Bitcoin (BTC) price could break the key support level at $42,000 as recent on-chain data shows miners abandoning their assets in a relatively unhealthy manner.
After initial signs of recovery, both Bitcoin's price and market capitalization slipped. drop 1.31% in the last 24 hours to $42,285.19 and $830,514,189,967.
The panic selling helped boost trading volume, which rose 59.80% to $22,531,240,745 in 24 hours.
The ongoing sell-offs no longer come as a shock to traders as Bitcoin did not move as expected despite the approval and subsequent launch of spot Bitcoin exchange-traded funds (ETF) products in the United States. However, this ongoing dump has one driving force: the miners.
Influence of Bitcoin miners on the price
Bitcoin miners play an important role in the network as the billions of dollars that change hands are validated by these companies and receive a reward in return. After According to top market analyst Ali Martinez, these miners are likely selling their shares.
He noted that the Bitcoin Miners' Position Index (MPI) is currently at a high of 9.43 and is showing an unusual move that suggests a possible sell-off.
According to Martinez, the recent sell-off could signal that the worst is over, but further sell-offs by mining companies are possible and this should lead to further exposure to the market.
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Additional insights from IntoTheBlock revealed that Bitcoin is at a crucial threshold, where 2.68 million addresses have purchased over 1 million BTC at an average price of $43,400.
The squeeze predicted by IntoTheBlock is that some buyers may continue to sell until they reach their break-even point, a situation that will add even more resistance to Bitcoin's attempt to embark on a recovery path.
As Bitcoin falls below $43,000, it is just below a significant on-chain level. 2.68 million addresses purchased over 1 million BTC at an average price of 43.4k. Uncertainty can cause these holders to sell to their break-even point, increasing resistance on an upward move. pic.twitter.com/Kw8ysF7AcX
– IntoTheBlock (@intotheblock) January 15, 2024
Is there hope for recovery?
Bitcoin usually weathers the harshest storms to reposition itself. After fall After the crash was extended by FTX's bankruptcy, Bitcoin fell to a low of $16,600 and soon rose again to a high of $48,969.37 last year.
The emergence of spot Bitcoin ETF products will also make a difference in the price of the asset in the long term predicted by many analysts in the industry. Based on these historical trends, there is a high probability that Bitcoin will rebound from the current lows.
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Disclaimer: This content is for informational purposes and should not be considered financial advice. The views expressed in this article may contain the personal opinion of the author and do not reflect the opinion of The Crypto Basic. Readers are advised to conduct thorough research before making any investment decisions. The Crypto Basic assumes no liability for any financial losses.
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