Bitcoin Miner Sell Pressure Declines: Good Sign for BTC’s Recovery?

Bitcoin BTC $95 534 24h volatility: 2.7% Market cap: $1.90 T Vol. 24h: $38.36 B sell pressure from miners has dropped significantly following the Fed-induced pullback in December. During the ‘Trump pump’ in November and December, the rally attracted profit-taking from miners.

But miner sell pressure has seen a massive reset into the new year. According to Charles Edwards, founder of hedge fund Capriole Investment, miner sell pressure was at a healthy level below 1. He deemed the reading a good sign for BTC.

Interestingly, the intense BTC dumping by miners also marked the local top of $108K seen last month. According to CryptoQuant data, miner reserve, the total amount of BTC held by miner wallets, dropped from 1.813M to 1.807M.

This meant that miners offloaded over 6K BTC in December. Since late November, miners have sold nearly 8K BTC from their reserves.

At press time, the Miner Reserve metric was flat above the 1.80M BTC level, reinforcing a reduced sell pressure. This reduced profit-taking from sellers could offer BTC enough room to reverse the December losses and reclaim the six-figure value above $100K.

Besides, there has been increased demand for BTC from large players like MicroStrategy, which has absorbed the recent BTC supply, including from miners. This has triggered a sharp drop in BTC inventory on exchanges (supply shock), as noted BTC analyst Willy Woo.

Collectively, the above setup of low-miner selling and increased demand from whales could aid the ongoing BTC recovery. As of this writing, BTC was valued at $98.9K, up nearly 8% from its recent lows of $91.5K.

However, this week’s FOMC Minutes, scheduled for Wednesday, and US labor updates on Friday could spike volatility on the price charts. Since the Fed’s December hawkish stance sparked a market-wide sell-off, a similar sentiment from the Minutes could induce a little bit of selling.

But BTC trader Cryp Nuevo, expected the cryptocurrency to climb to the liquidity pool near $101K.

Whether the recovery will continue strongly above $100K remains to be seen. However, after the US macro updates this week, the markets will shift focus to President-elect Donald Trump’s inauguration on 20 January.

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