With the recent price drop in Bitcoin, how the selling pressure is distributed in the market has attracted much attention. It has been observed that the cryptocurrency market is going through a rare period when short-term investors and miners are selling heavily at the same time. However, this rising supply was quickly absorbed by larger investors. Thus, the short-term decline expectation weakened and paved the way for the market to stabilize.
Elimination of Weak Hands with Simultaneous Sales
When the Bitcoin price dropped to $60,000 at the beginning of February, short-term investors and miners started selling heavily. Miner Position Index went up to 2.95; This is a level seen in the past when forced sales and cash generation pressure increased. During this period, the average purchase price of short-term investors was around 92 thousand dollars. Since the price remained below this level, many new investors began to exit their positions at a loss. The fact that the sales were made at a loss was confirmed by measuring the STH SOPR data as 0.977.
The Role of Large Investors and Long-Term Holders
This sales wave in the market did not have difficulty finding buyers; Wallets with balances between 100 and 1,000 Bitcoins accounted for 77% of total inflows. The fact that long-term investor accounts added $5.68 billion to their total capital in the same period also pointed out this trend. While the total price remained close to the 69 thousand dollar band, long-term investors continued to increase their savings. Thus, despite the selling pressure, prices on the stock exchanges were prevented from falling further. During this period, the cyclicality of the supply withdrawn from the market also decreased, meaning the amount of coins returning to the market was limited.
Miners’ Difficult Times Continue
Although the intense selling wave seems to have ended in the short term, the pressure on miners continues. After the oversale, the Miner’s Position Index dropped to -1.31; This indicates that selling pressure has decreased. However, during this period, miner income did not fully reach its previous level. Although earnings per hashrate (hashprice) has recovered from the trough in early February, it remains significantly below its annual average. Therefore, miners remain sensitive to price volatility and the risk of permanent low income.
At the same time, the fact that the cost for short-term investors is around $91,855 means that the sales potential may still continue downwards. Unless the price remains above this level, loss-making sales are not expected to end completely in the near future.
Market data shows that the short-term two-sided sell-off has largely been absorbed thanks to coordinated buying by long-term investors and whales. While this accumulation process increases the possibility of a supply shock in the future, it does not mean that all uncertainties have disappeared.
It is observed that miner revenues are still low and most of the new investors remain outside the profit zone. The current picture highlights a rebalancing of market dynamics, supported by an increase in demand, rather than a further upward movement.
