Bitcoin On-Chain Analysis: Sell Pressure from this Major Entity Neglected, says Willy Woo

By Nivesh Rustgi
Published April 6, 2020 Updated April 6, 2020
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Bitcoin BTC mining
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Bitcoin On-Chain Analysis: Sell Pressure from this Major Entity Neglected, says Willy Woo

By Nivesh Rustgi
Published April 6, 2020 Updated April 6, 2020

Bitcoin [BTC] has been exhibiting a lot of volatility in the last few days with no clear direction in price. The investors are torn between the pressures arising due to COVID-19 and the bulls looking to long the halving narrative.


Halving will not only reduce the rate of supply of Bitcoin but also affect the selling pressure from the miners. Due to its intrinsic design, BTC rewards need to be sold off to cover the associated electricity cost. Hence, the reduction in the selling volume is primarily responsible for the bullish price.

However, Willy Woo, leading on-chain analyst, notes via an unnamed source that there is an uncounted entity in the discussion – crypto exchanges. He notes,

We’re over-estimating the impact of the halvening in this cycle. In 2020, unlike 2016, we now have 1200 BTC per day in a fees market from exchanges selling their BTC earnings to fiat.

He further adds this variable to the over-all sell pressures from the miners; which is around 1800 BTC. Hence, 2100 BTC (900 + 1200) post halving compared to 3000 BTC now. a 30% reduction, not 50% (as presumed). He adds that considering the above fact, the ‘floor price’ of Bitcoin is likely to be around $7-8k.

On Miner Capitulation

Miner capitulation leads to accelerated bottom followed by bullish accumulation. It has been useful in identifying bottoms in Bitcoin. According to Woo, the weak miners are dead, and the capitulation seems to have occurred. He tweeted,

Hash Ribbons recovering (assumes no lower low), a reliable bottom signal, probably some miner capitulation during the crash. They last got culled in Dec 2018, only the strong remain, I don’t expect miners to add more sell pressure from here.

bitcoin mining hash ribbon
Bitcoin [BTC] Mining Hash Ribbon (Source: Twitter)
The chart above plots the moving averages for mining hashrate from short term (9 Day) to long time frames (200 Day). During capitulations, the lower time-frame moving averages witness a pullback and the bands (like difficulty bands) begin to compress.

Furthermore, he also points at another bullish indicator -the Miners Energy Ratio. It is calculated by comparing the total electric energy consumption and market capitalization.

bitcoin energy band ratio
Bitcoin Energy Band Ratio (Source: Twitter)

But Transactions are Dropping

While decreasing sell pressures is a positive indicator of price, the demand might be getting negatively affected. The lockdown in several parts of the world is not only affecting trade, but also the transaction volume on Bitcoin.

The total transaction volume has dropped from over 250-300k transactions to 175k, with a drop in transaction fees as well. In case of a further decrease in the metrics, the lowering of activity might affect the price adversely as well.

bitcoin transaction volume
Bitcoin [BTC] Transaction Volume and Fees Chart (Source)
Currently, the markets are undergoing an exceptionally odd crisis due to the pandemic spread of the virus. The miners seemed to have adjusted to shocks, while the traders are mulling under uncertain macroeconomic environment.

Do you think Bitcoin has bottomed? Please share your views with us. 

The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.
About Author
Nivesh Rustgi
1181 Articles
Nivesh from Engineering Background is a full-time Crypto Analyst at Coingape. He is an atheist who believes in love and cultural diversity. He believes that Cryptocurrency is a necessity to deter corruption. He holds small amounts of cryptocurrencies. Faith and fear are two sides of the same coin. Follow him on Twitter at @nivishoes or mail him at nivesh(at)

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