Despite Bitcoin price continues to move above the $17,000 level, miners’ capitulation remains the primary reason behind the sluggish price movement. Analysts expect the BTC price to have a slow upside above 17k but will likely face strong resistance at $18k.
Bitcoin price saw massive price momentum after U.S. Federal Reserve Chair Jerome Powell announced a slowdown in interest rate hikes from December. The BTC price breaks above the $16.5k level to hit a high of $17,197. However, it remains under pressure due to miner capitulation.
The fall in Bitcoin price in this long bear market and the high cost of mining are forcing miners to sell their Bitcoin positions. Some are even selling their mining rigs to cover financial crunch.
The short-term inflows and outflows of Miners’ wallets on-chain data indicate a high value of outflows in November. It may cause a drop in price or an increase in volatility. Miners sold over 6k BTC last week and 10k BTC this week. On-chain platforms confirmed that miner Poolin sold 10,050 Bitcoin to crypto exchange Coinbene.
According to Glassnode data, 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. The last time a 14-month low of 1,818,778.794 was in October last year. Moreover, Bitcoin hashrate continues to fall due to decreased mining activity.
Traders can use the Miner Selling Power research indicator as it compares total miner output divided by total miner supply. Thus, it confirms whether miners are selling their positions.
According to Spent Output Profit Ratio (SOPR) on-chain data, short-term participants continue to sell in losses with SOPR of less than 1. The lack of positive sentiments makes $18k a strong resistance level.
Moreover, crypto analyst Michael van de Poppe earlier predicted that Bitcoin price can continue to rally toward $18.3k if it holds the $16.6k support level. He also pointed out that Bitcoin price has reached the previous bear markets bottom where the price generally starts to rise.
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