Bitcoin (BTC) Price Dump Incoming? On-Chain Data Reveals Bottom
Bitcoin (BTC) price failed to hold above $17k and fell to the support near $16,500 again. The BTC price remains under pressure as miner capitulation risk continues to haunt traders looking to make long positions. On-chain data reveals miners are indeed liquidating their Bitcoin holdings due to financial constraints. The effect can be easily seen in the falling share prices of mining companies.
Miner Capitulation Risks Sharp Fall in Bitcoin Price
Crypto mining stocks listed on NASDAQ including Marathon Digital, Core Scientific, Riot Blockchain, Hut 8 Mining, HIVE Blockchain Technologies, and Stronghold Digital Mining fell massively in the last 6 months. The situation has worsened this month, with Marathon Digital, Core Scientific, and Stronghold Digital Mining plunging 46%, 20%, and 38% in a month, respectively.
Crypto miners have reported poor quarterly results and dropping numbers of crypto assets mined. While Bitcoin prices have fallen this year, Bitcoin hashrate, which denotes mining competition, has reached a maximum.
However, hashrate and mining difficulty started to fall this month due to a decline in mining activity. The mining industry is under stress amid depressed coin prices, rising energy costs, and debt burdens. Therefore, financial crunch and falling stock prices will make companies eventually go bankrupt, with dumping Bitcoin as the last resort.
Moreover, miners’ BTC reserves have decreased by 13K BTC in the last few months. It has now reached a 14-month low of 1,818,280.032 BTCs, as per Glassnode.
Millions in BTC Longs Liquidated and Possible Bottom
Bitcoin saw over $15 million in longs liquidated in the last 24 hours, according to Coinglass data. The liquidation of longs caused the BTC price to decline in the last 24 hours, reversing the bullish sentiment of $18K.
On-chain data also suggests that if the BTC price falls below the $16.5k support level, it can hit the delta price of $12.8k. According to CoinMarketCap, Bitcoin price is currently trading at $16,835.
Also Read: Over 10K Bitcoin (BTC) Moved To Crypto Exchange, Are Miners Selling?
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