Bitcoin whales and miners have liquidated $1.2 billion of collective holdings, indicating increased profit-taking. It has been so ever since the largest cryptocurrency by value crossed the $70,000 mark at the end of May.
They are most likely selling their reserves to brokers rather than on exchanges. CryptoQuant’s data suggests exactly that, as it reveals Bitcoin UTXO age band sizes decreasing – a phenomenon associated with increased BTC selling – without funds moving to exchanges.
UTXO refers to the unspent transaction output. It is part of every Bitcoin transaction, and a decrease in the UTXO’s age indicates increased activity tied to selling. On-chain analysis shows stablecoin liquidity decreasing, which indicates holders moving out of their BTC positions by trading for fiat-pegged assets.
Miners offloading their BTC reserves ties into the recent halving. As block rewards essentially decreased by half, several miners are turning to avenues that offer increased profits. Since AI-related use cases require the processing power offered by the likes of mining rigs, miners are selling their services to AI companies instead. With miners moving out of Bitcoin mining, they are liquidating their assets in bulk through brokers.
Alongside that, macroeconomic factors add selling pressure upon BTC holders. A robust dollar performance and unchanged interest rates are pushing away many holders from riskier asset classes to traditional markets. BTC ETFs listed in the US are also witnessing massive outflows. Last week saw about $600 million flushed out of ETFs.
With massive resistance on its way up, BTC is not receiving the needed push to break through. Its drop from over $70,000 to its current price of below $65,000 is forcing holders to liquidate tremendously. Some BTC traders believe that its price will drop even further to $60,000 or less in the coming days and weeks.
CryptoQuant’s CEO posted on X, “#Bitcoin long-term holder whales sold $1.2B in the past 2 weeks, likely through brokers.” He continued mentioning that BTC prices can witness further drops when brokers deposit BTC on exchanges. “If this ~$1.6B [including ETF outflows] in sell-side liquidity isn’t bought OTC, brokers may deposit $BTC to exchanges, impacting the market.”
Image by Gerd Altmann from Pixabay
