Bitcoin (BTC), the world’s most valuable cryptocurrency, faced a brief dip but quickly recovered above the $26,000 level. In the last 24 hours, several cryptocurrencies experienced modest gains as investors eagerly anticipated the release of May’s Consumer Price Index (CPI) data.
#BITCOIN BACK ABOVE $26K
— CoTrade (@CoTradeSignals) June 13, 2023
Bitcoin had a momentary drop to $25,503 before recovering to the $26,000 level over the weekend. However, the general sentiment in the market remains bearish, with investors closely monitoring the upcoming interest rate decision by the US Federal Reserve, scheduled for tomorrow.
However, the ongoing bearish pressure on BTC prices can be attributed to a combination of factors. These include continuing lawsuits by the US SEC against crypto exchanges, concerns about inflation, and upcoming economic indicators. All of these factors have been exerting downward pressure on BTC prices.
The U.S. Securities and Exchange Commission (SEC) has filed a lawsuit against Binance – the world’s largest crypto exchange – on Monday, alongside its CEO Changpeng Zhao (CZ) and partner firm, Binance US. $BTC
— DE29 ⓻ (33.3%) (@MathildeRey10) June 5, 2023
Besides this, Bitcoin miners have been selling their BTC holdings since June, potentially adding further bearish pressure on the BTC price.
This is because when Bitcoin miners sell their BTC holdings, it increases the available supply in the market. This increased supply can impact the price, potentially leading to a decrease in BTC prices.
In contrast, Bitcoin’s mining difficulty reached an all-time high in early June. This was seen as a positive development for BTC price in the long term. High mining difficulty signifies a more secure and resilient network, making manipulating the blockchain challenging for malicious actors.
The current Bitcoin price is $26,093.79, and the 24-hour trading volume is $11,580,334,433. Bitcoin has increased by more than 1% in the previous 24 hours.
Bitcoin Miners Selling BTC Holdings Amidst Increased Selling Pressure
As we mentioned, Bitcoin miners have been selling their BTC holdings since the beginning of June, potentially putting downward pressure on the BTC price.
On-chain data indicates miners are offloading their coins, possibly due to reduced earnings resulting from decreased transaction activity and the record-high mining difficulty and hash rate.
— Block Savvy (@Block_Savvy) June 12, 2023
Glassnode, an on-chain analytics firm, reports a significant increase in miners’ inflows to exchanges, reaching levels not seen since the early 2021 bull market.
Coin Metrics data also reveals a decline in the one-hop supply metric, which measures the quantity of Bitcoin held in addresses receiving coins from mining pools.
Previously, the metric had shown a consistent increase in miner holdings since May 2023. However, miners reversed their accumulation trend in the second week of June.
⚠️ #Bitcoin miners are selling off their holdings, as indicated by on-chain data. @glassnode reports a substantial increase in #BTC miners inflows to exchanges, reaching a level not seen in three years since the early 2021 bull market!
— BecauseBitcoin.com (@BecauseBitcoin) June 12, 2023
This indicates a shift from accumulating BTC to selling it. The influx of coins to exchanges and the decline in miner-held supply suggest that miners are actively liquidating their BTC.
These developments contribute to the selling pressure on BTC, potentially impacting its price. However, miners’ increased supply of BTC can weigh on the market as more coins become available for trading.
Investors and market participants will closely monitor these trends and their impact on BTC price movements as miners’ selling activity continues to unfold.
Impact of Rising Bitcoin Mining Difficulty and Summer Heat on BTC Prices
Another important factor to consider is the recent surge in Bitcoin mining difficulty and the intensified competition among miners. This is likely to affect BTC prices as well. The increasing difficulty level makes mining less profitable, leading to potential losses.
— Lab4crypto (@Lab4crypto_) June 9, 2023
To cope with reduced earnings, miners may sell some of their mined Bitcoin, creating additional selling pressure in the market.
Furthermore, the decline in Bitcoin Ordinals activity and reduced fees paid for Ordinal inscriptions indicate a decrease in miner revenue. This and lower trading volumes on nonfungible token marketplaces add to the overall downward pressure on miner earnings.
Meanwhile, the start of summer in the Northern Hemisphere brings hot temperatures that put a strain on mining farms, increasing electricity costs. In 2022, heat waves in Texas caused temporary shutdowns of mining operations, impacting a significant portion of the mining capacity in the United States.
If similar heat waves occur in 2023, it could lead to a downturn in the network’s mining hash rate.
Impact of Cautious Market Sentiment and Fed Meeting on BTC Prices
The global market sentiment remained cautious ahead of critical US inflation data and the Federal Reserve’s monetary policy meeting. Investors are eagerly awaiting the US Labor Department’s Consumer Price Index (CPI) report, which is expected to show a slight cooling of inflation in May.
If the data supports this expectation, the Fed could pause its aggressive interest rate hikes.
U.S. ECONOMIC DATA THIS WEEK:
*CPI INFLATION (TUES.)
*PPI INFLATION (WED.)
*FED RATE DECISION (WED.)
*RETAIL SALES (THURS.)
*JOBLESS CLAIMS (THURS.)
*NY MANUFACTURING INDEX (THURS.)
*PHILLY MANUFACTURING INDEX (THURS.)
*CONSUMER SENTIMENT (FRI.)$DIA $SPY $QQQ pic.twitter.com/ML7boGZ5UO
— Investing.com (@Investingcom) June 11, 2023
Market expectations suggest an 84% chance that the Fed will keep interest rates unchanged in its upcoming meeting. This sentiment has kept risk appetite high and contributed to the U.S. dollar remaining near multi-week lows.
Hence, the bearish outlook for the US dollar was seen as a factor that may help limit potential losses for Bitcoin prices.
- Memecoin Price Predictions: These 3 Memecoins Are Poised to Explode as Most Altcoins Crash
- Bitcoin Price Prediction: Can BTC Bulls Hold $25k as Altcoin Prices Plummet?
- Bitcoin Price Prediction: Altcoin Holders Swap For BTC in Droves While Long-Term Holders Stay Strong
What's the Best Crypto to Buy Now?
- B2C Listed the Top Rated Cryptocurrencies for 2023
- Get Early Access to Presales & Private Sales
- KYC Verified & Audited, Public Teams
- Most Voted for Tokens on CoinSniper
- Upcoming Listings on Exchanges, NFT Drops