CryptoQuant analysts have found that Bitcoin miners have increased their selling activity in the last month amid slow demand growth for BTC.
According to the latest CryptoQuant weekly report, the decrease in BTC demand is evident in low Bitcoin whale demand, fewer purchases from spot exchange-traded funds in the United States, and the Coinbase premium falling below zero.
Miners Increase Selling Activity
Miners have sent a large amount of BTC to spot exchanges, creating an imbalance in the market. Since the halving was completed on April 19, miners’ revenue has decreased significantly following the reduction of block rewards by 50%.
Presently, mining entities are selling their holdings to cover operational costs; however, if the trend continues and miners’ profitability turns negative, the price of BTC may witness more pressure.
Due to the high miner selling activity, BTC supply is outpacing demand. CryptoQuant head of research Julio Moreno revealed yesterday that the total balance of BTC at over-the-counter (OTC) desks started to increase when the crypto asset peaked at $73,000 in mid-March. OTC supply has remained on the rise since then, hitting its highest level since November 2022, but demand has slowed.
Demand for BTC Slows Down
The monthly growth of BTC demand from permanent holders (investors who purchase BTC and never sell) has plummeted 50% from 200,000 BTC in late March to 96,000 BTC at the time of writing. Analysts noted that accelerating demand growth is needed for prices to bottom and eventually spike.
Demand growth from large investors and Bitcoin whales has also fallen from a peak of 12% in late March to 6% currently. Spot Bitcoin ETFs in the U.S. have recently recorded significant outflows and little to no inflows, falling significantly from a mid-March peak of $1 billion.
Additionally, the funding rate in the perpetual futures market has fallen to its lowest level this year, indicating that selling orders are outpacing buy orders, and traders are not willing to pay as much as before to open long positions. Traders are also opening more short positions in anticipation of further price declines.
With BTC hovering around two-month low levels of $60,000, the asset may target $55,000 to $57,000 in the short term. This range is 10% below traders’ current cost basis of $63,000, a level which acts as a support during bull markets.
