Historically speaking, some miners tend to start selling their various Bitcoin (BTC) holdings by the end of July. This, in turn, leads to an increase of selling pressure within the crypto market at large, as everything gets tied to Bitcoin, in some way or another.
Holding Out Hopes
Back in Mid-August of this year, the dominant cryptocurrency saw a steep drop, going down by 13%. Ever since, Bitcoin has been hard-pressed in order to retake the price range of $12,000
Ki Young Ju stands as the CEO of CryptoQuant, and claimed that the ongoing selling pressure caused by miners might not be enough to stop an upcoming bull run. Data analysis firms on-chain have been watching the movements of both whales and miners closely, due to the large holdings of BTC they have.
Miner Update: Some miners began selling at the end of July, but I think in the long-run, miners didn’t sell $BTC large enough to stop the next bull-run.https://t.co/X0Uf3Sfzck pic.twitter.com/pHrmaylPyz
— Ki Young Ju (@ki_young_ju) September 20, 2020
Whales Wanting Their Share
Willy Woo stands as an on-chain analyst, and gave an explanation about the matter. Woo stated that miners serve as one of the two external sources that provide selling pressure for BTC. In the past, he described this sell pressure as unmatched, and stands alongside exchanges that sell their crypto after having taxed their traders.
Post this 2020 halvening miners will cease to be the biggest sellers of Bitcoin. It’ll be the dawn of the crypto exchange as the leading seller.
The biggest sell pressure on Bitcoin will soon be from exchanges selling their BTC fees collected into fiat.
— Willy Woo (@woonomic) May 9, 2020
Should miners start to sell their various BTC holdings, typically as a bid to cover expenses, it might very well cause a correction movement within the crypto market at large.
An example of this would be during the 17th of August all the way to the 5th of September of this year. Back then, Bitcoin’s price dropped from $12,486 to just $9,813. During this time, however, a number of whale accounts sold their Bitcoin holdings just as the price hit $12,000. At the same time, Bitcoin miners exhibited the same behavior, as well.
Nothing Too Big Yet
The massive amount of selling pressure from both whales and miners have considerably contributed to the current slump in the crypto market. However, Ki stated that this isn’t enough to stop a prolonged bull run when one starts thinking about the long-term.
The theory goes that should miners quickly sell a significant amount of BTC, a severe correction could occur. This is due to heavily-leveraged traders could see a liquidation even from a small movement in price. Thus, a relatively small sell-off event could, in theory, trigger a catastrophic price swing, which would cause more liquidations, and so the cycle can continue.
Even so, Ki stands convinced that the rate miners are selling their holdings isn’t enough to grind a bull run to its halt.