- Bitcoin miners could sell as lower mining rewards and transaction fees reduce revenue.
- A potential sell-off by miners could have a dramatic impact on the cryptocurrency market.
Bitcoin [BTC] continues to hold significant value, trading above $60,000 despite falling 2.3% over the past day.
This resilience in price comes amid a challenging period for Bitcoin miners, whose revenues have plummeted after the most recent halving, according to facts from Kaiko.
The pressure on Bitcoin miners is increasing
Bitcoin miners are facing increasing pressure to sell their holdings due to declining revenues.
The recent halving, which reduced mining rewards from 6.25 BTC to 3.125 BTC, has had a significant impact on their revenue.
This revenue decline is further exacerbated by declining transaction costs, which have not recovered since the initial post-halving increase.
Source: Kaiko
Kaiko’s report highlights that miners’ dual revenue streams – mining rewards and transaction fees – produce lower returns.
This forces miners to consider offloading their BTC to cover operational costs. Kaiko analysts noted:
“The halving has typically been a selling event for Bitcoin miners, as the process of creating new blocks incurs significant costs, forcing miners to sell to cover costs.”
Source: Kaiko
The potential for a Bitcoin sell-off by miners could have profound implications for the cryptocurrency market, especially given the current low liquidity.
Mining giants like Marathon Digital, which holds more than $1.1 billion worth of Bitcoin, could cause significant market movements if they decide to sell even a small portion of their holdings.
Kaiko’s report explains.
“Bitcoin miners typically classify their BTC holdings as current assets due to their ability to liquidate these holdings to finance operating expenses.”
Since major players like Marathon Digital and Riot Platforms hold significant amounts of Bitcoin, any forced selling could lead to notable market impacts.
Bitcoin network activity is declining
Meanwhile, Bitcoin’s network activity is showing signs of slowing down.
from Glassnode facts shows that the number of active Bitcoin addresses (7d EMA) has fallen from over 800,000 to under 700,000 in recent weeks.
Source: Glassnode
Similarly, the number of new addresses (7d EMA) has decreased from approximately 388,158 to 267,925, indicating a possible decline in user engagement and interest.
Source: Glassnode
Short-term technical analysis suggested that Bitcoin hit liquidity on the 30-minute chart on May 14.
This suggested that assets could continue to retreat towards $60,000 – a swing low – before any significant upward move occurs.
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The potential decline, coupled with pressure on miners, could set the stage for a volatile period in the Bitcoin market.
Source: TradingView
Meanwhile, AMBCrytpo recently reported that crypto analyst Ali Martinez predicted that as Bitcoin can recover $64,290 as a support level, there could be a path to a bullish rise towards $76,610.