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Bitcoin Miners Are Under Pressure and Selling Coins: CryptoQuant
Data shows that Bitcoin miners have increased sales, evidenced by increased activity at over-the-counter desks and transfers from mining pools to exchanges.
Onchain analytics firm CryptoQuant noted that Bitcoin miners are under pressure and have started selling their coins in recent weeks.
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Posted June 14, 2024 at 3:11 am EST.
The post-halving effect on the Bitcoin mining industry may now truly be underway, as lower transaction fees on the network translate into lower revenues and reduced margins.
Onchain analytics firm CryptoQuant observed that Bitcoin miners are under pressure and have started selling their coins in recent weeks as the price of Bitcoin has fluctuated between $69,000 and $71,000.
One of the sell-off signals for miners pointed out by CryptoQuant analysts is the increase in transfers from mining pools to the cryptocurrency exchange Binance. On June 9, these transfers reached a two-month high of over 3,000 BTC, aligning with a bitcoin price correction that fell to $66,000 on the day.
Miner activity on over-the-counter (OTC) desks also saw an increase in activity, especially on June 10, when miners sold 1,200 BTC, marking the highest daily volume since March.
Meanwhile, publicly traded bitcoin miners such as Marathon Digital were seen offloading bitcoin holdings, selling 1,400 BTC in June compared to 390 BTC in May.
Explaining the context for the miner sale, analysts highlighted that Bitcoin miner revenues have fallen 55% from 2024 highs to around $35 million this month.
“Amid low mining revenues following the halving, daily Bitcoin transaction fees fell to around 65 bitcoins from 117 before April 18. Despite record transactions, average transaction fees in US dollars remain low, highlighting the pressure on miners’ income,” CryptoQuant said.
Bitcoin’s hashrate, which measures the amount of miner processing power going into the network, saw a more modest decline of 4%, from 622 exahashes per second (EH/s) to 599 EH/s. This implies that there is still a high number of miners online and that competition in the industry remains quite high.
“Periods in which mining company revenues are low and hashrate remains high often point to potential market downturns,” the analysts said. “Since May, miners have faced significant underpayments, suggesting we may be close to the price floor.”