Bitcoin Miner Selling Pressure Lowers as BTC Price Goes Above $47K: CryptoQuant

On-chain analysis by market intelligence platform CryptoQuant has found that selling pressure from Bitcoin miners has eased and remained low despite a significant decline in transaction fees.

According to the firm’s latest weekly report, Bitcoin sold daily by miners currently sits around 300 BTC, significantly down from the companies’ 800 BTC daily sales in November and December 2023.

Bitcoin Miner Selling Pressure Remains Low

Bitcoin miner selling pressure has stayed low in 2024 as the largest publicly traded mining firms replenish their holdings. This increase in the companies’ BTC holdings comes as miner profitability decreases by its largest amount in at least a year.

CryptoQuant analysts said miner profit/loss sustainability metrics show these firms have been “mostly extremely” underpaid in 2024 due to fewer transactions on the Bitcoin network. Bitcoin’s transaction count has fallen to a three-month low of 278,000 from December’s all-time high of 731,000 daily.

The decline in Bitcoin transactions can be attributed to less activity from Ordinals inscriptions and BRC20 tokens. This is also evident in the number of transactions using taproot addresses, which have plunged by 76% since December.

“Lower transaction activity, and especially lower taproot address use for inscriptions and BRC20 tokens, impacts Bitcoin transactions fees to the downside. Indeed, total daily Bitcoin fees have declined from 560 in December 15 to 53 in February 5, a 90% decline, at the same time that taproot transactions also fell,” analysts stated.

BTC Investors Demand Recovers

Besides miner selling pressure easing up, downward pressure on BTC’s price has reduced as the asset falls towards the cost basis of short-term holders and traders. In addition, the BTC price premium of crypto exchange Coinbase shows that demand from Bitcoin investors in the U.S. has recovered slightly.

Nevertheless, buyers in derivative markets have not regained enough control to sustain a significant price rally. Sell orders are still dominating, which is evident in the buy-sell ratio staying below zero. Still, BTC’s price has increased by several grand in the past few days and even came close to $48,000 on Friday.

Meanwhile, CryptoQuant’s analysis contrasts with a Bitfinex report a few days back, which attributed the latest plunge in BTC’s price to a selling spree among Bitcoin miners. Bitfinex said miners are offloading their BTC reserves to provide capital and upgrade infrastructure in preparation for the upcoming Bitcoin halving event.