Investigative work argues that on-chain metrics are proving miners have capitulated, while whales appear to be lone Bitcoin dip-buyers.
Bitcoin (BTC) miners may have already sparked a “capitulation event,” fresh analysis has concluded.
In an update on June 24, Julio Moreno, senior analyst at on-chain data firm CryptoQuant, hinted that the BTC price bottom could now be due.
BTC price bottom “typically” follows miner capitulation
Miners have seen a dramatic change in circumstances since March 2020, going from unprecedented profitability to seeing their margins squeezed.
The dip to $17,600 — 70% below November’s all-time highs for BTC/USD — has hit some players hard, data now shows, with miner wallets sending large amounts of coins to exchanges.
This, CryptoQuant suggests, precedes the final stages of the Bitcoin sell-off more broadly in line with historical precedent.
“Our data demonstrate a miner capitulation event that has occurred, which has typically preceded market bottoms in previous cycles,” Moreno summarized.
Miner sales have been keenly tracked this month, with the Bitcoin Twitter account even describing the situation as miners “being drained of their coins.”
The #Bitcoin miners are being drained of their coins. pic.twitter.com/O0i9Lx0wQF
— Bitcoin (@Bitcoin) June 18, 2022
“For miners, it’s time to decide to stay or leave,” CryptoQuant CEO, Ki Young Ju, added in a Twitter thread last week.
The situation is tenuous, but the majority of miners remain active, as witnessed by network fundamentals dropping only slightly from all-time highs of over 30 trillion.
Bitcoin network fundamentals overview (screenshot). Source: BTC.com
Mixed signals over buyer interest
When it comes to other large BTC holders, however, the picture appears less clear.
Related: ‘Foolish’ to deny Bitcoin price can go under $10K — Analysis
After whales bought up liquidity near $19,000, CryptoQuant’s Ki this week heralded the arrival of “new” large-volume entities.
Outflows from major United States exchange Coinbase, he noted, reached their highest since 2013.
Time to welcome new #Bitcoin whales.
Average $BTC outflows from @Coinbase hit a 9-year high. Average inflows are high as well.
There are lots of exchange in/outflows from whales lately, but actually, nothing changed on BTC reserve across all exchanges.https://t.co/Ptw2mg9YuR pic.twitter.com/s697lSvw27
— Ki Young Ju (@ki_young_ju) June 23, 2022
Trader and analyst Rekt Capital, nonetheless, reiterated doubts about the strength of overall buyer volume, arguing that sellers were conversely still directing market movements.
Bitcoin’s 200-week moving average (MA), a key support level during previous bear markets, has yet to see significant interest from buyers despite the spot price being around $2,000 below it.
“Current BTC buy-side volume following the extreme sell volume spike is still lower than the 2018 Bear Market buyer follow-through volume levels at the 200-week MA. Let alone March 2020 buy-side follow-through,” he told Twitter followers.
BTC/USD annotated chart. Source: Rekt Capital/ Twitter
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