To paraphrase a well-known aphorism, conversations on two topics are inevitable in the crypto market – “bitcoin is digital gold” and “miners destroy the exchange rate by selling off stocks.” Perhaps these are the most serious and dangerous misconceptions of investors, as they create a distorted picture of what is happening in the market. If to combat the first of them, it is enough to point out the correlation of the cue ball with US technology stocks – the same risky asset (especially noticeable in recent months), then everything is a little more complicated with the second one.
First of all, it is worth understanding that mining is a business with its own costs, money for which must be taken from somewhere. It is quite obvious that they cover expenses at the expense of income from their main activities, and perhaps this is due to the sale of part of the mined coins.
This is a natural process and you should not react violently to it somehow.
Do miners understand that by conducting chaotic sales they sell coins cheaper than they could? Sure. Are they interested in losing income? No. It should be understood that now there is absolutely no reason to panic, at least in relation to bitcoin, which will not disappear anywhere, since it is tightly integrated into various kinds of investment processes. In addition, a serious infrastructure has been created around it – in the word “too big to fall”. Thus, there are no reasons for increased sales on the part of miners, who are not impulsive “mom’s” traders, but rather serious people with capital (mainly).
There is no increase in sales volume: the average moving (14 days) outflow from miners’ wallets has reached a plateau and has not changed for several months, during which there were only two bursts of activity – April 1 and May 11.
Bitcoin has been in a bear market since November and so far there are no reasons to change sentiment, which means that price impulses (up) should be considered only from the point of view of partial profit-taking (if money management implies) and opening new short positions. The growth and fall of assets does not occur indefinitely, but alternates with reverse movements. This is due to the specifics of trading: in order, in our case, to continue the downward movement, it is necessary to eliminate the obstacle on the part of buyers. This happens by collecting “sucking out” liquidity – consistently luring “bulls” into a trap, taking their money and depriving them of the opportunity to restrain the price from further falling.
In the near future, bitcoin quotes can easily go below $ 20 thousand. The longer the price is kept from falling, the lower it will eventually fall. At this rate, sellers will be able to bring bitcoin to the $10 thousand mark.