Bitcoin traders are bracing themselves for a possible drop in the value of the cryptocurrency in the near future. This is despite positive trends in the equity market and supportive U.S. crypto policies. The reason behind this anticipation is the selling activity observed among miners and general profit-taking by investors.
According to experts, miners’ cash demand could be limiting the upward potential of Bitcoin. Data from on-chain sources indicates a rise in the transfer of BTC from mining pools to exchanges, which is often a sign of impending selling pressure. This movement of funds could lead to a further correction in the price of Bitcoin.
Analysts have noted a decline in the net position of miners since May, following the Bitcoin halving event in April. The outflow of BTC from miners does not necessarily impact the price directly but could contribute to a stagnant market. Additionally, there has been a significant increase in selling via professional over-the-counter desks, further adding to the selling pressure.
Despite a brief surge in Bitcoin’s price following the release of May’s U.S. CPI data, the cryptocurrency quickly retraced its gains due to changes in rate cut forecasts by the Federal Open Market Committee. Other major tokens like BNB, XRP, and SOL have also experienced significant drops this week, along with meme coins like DOGE and SHIB.
It is worth noting that U.S.-listed spot BTC exchange-traded funds have witnessed substantial outflows this week, marking their worst performance since April. Bitcoin’s correlation with the Nasdaq technology index has also shown signs of decoupling, deviating from its usual positive relationship with tech stocks.
In comparison to Bitcoin, market observers have expressed concerns about the short-term sentiment surrounding Ethereum. ETH appears to be in a more bearish position than BTC, with experts suggesting that reclaiming the $3,700 level is crucial to avoid further downside in the coming days and weeks. Despite these short-term challenges, the long-term outlook for both Bitcoin and Ethereum remains positive.
Overall, the cryptocurrency market is experiencing fluctuations and adjustments, influenced by various factors such as miner activity, market sentiment, and external economic indicators. Traders and investors are advised to closely monitor these developments and adjust their strategies accordingly to navigate the volatile crypto landscape successfully.