Bitcoin selling pressure grows slowly, is $20,000 just around the corner?

As traditional financial institutions began to actively participate in cryptocurrency transactions, Bitcoin continued to rise over the past week. On the 14th of this month, it gained $3,200 in one day, and yesterday's high reached $19,400, a weekly increase of 20%. In addition, there has been no sign of whales or miners selling in the market so far, and it seems that Bitcoin still has more room to rise.

From the perspective of market supply and demand, judging the movements of miners is considered to be a particularly critical on-chain data in the early stages of a bull market. Since the advent of Bitcoin, miners' selling behavior has mostly led to a sharp drop in prices. Usually after the bull market starts, miners will gradually increase their efforts to sell coins, and after the price reaches a peak and begins to fall, the amount of selling will gradually decrease.

In order to better identify the movements of miners in the market, CryptoQuant has drawn the "Miners' Position Index" (MPI), which counts the total amount of Bitcoin transferred from the wallets of major global miners to other wallets. By observing the average value of this indicator in the past 30 days, it can be found that there is no obvious sign of concentrated selling by miners recently, and the transfer volume has basically remained above the medium and long-term average level.

The latest miner position indicator and Bitcoin price chart

Similarly, there have been relatively few on-chain transfers by whales recently, so it can be predicted that prices are unlikely to fall sharply in the short term.

Percentage of whale activity on exchanges (using 90-day moving average)

Based on different observation criteria, the proportion of whales in transactions can be viewed from various angles. For example, observing the real-time proportion requires a shorter time dimension. By observing the 72-hour moving average in the figure below, it can be seen that if the indicator remains below 85%, it indicates that the price will remain stable.

The proportion of whale activity on exchanges (using 72-hour moving average)

As shown in the figure, once the indicator breaks through 85%, the price of Bitcoin will most likely fall sharply soon. The indicator exceeded 85% a week ago and recently fell to about 79% (returning to a relatively "safe" area).

In addition to CryptoQuant, many analysts have also released bullish analysis on Bitcoin. Cole Garner, a well-known US cryptocurrency analyst, cited CryptoQuant data on the 21st and pointed out that the Bitcoin balance in exchanges is gradually decreasing, and the decline in Bitcoin liquidity has driven up its price.

In addition, the balance of stablecoins in the exchange can also be used as a basis for judging whether Bitcoin still has buying value. The ratio of this value to the total amount of Bitcoin holdings in the exchange can be used to measure the selling pressure of Bitcoin in the market. The figure below is the historical performance of the indicator calculated and drawn by CryptoQuant.

Exchange Bitcoin/stablecoin holdings ratio

This indicator is calculated by dividing the total amount of Bitcoin in the exchange by the total amount of stablecoins. Simply put, the higher the proportion of stablecoin holdings in the exchange, the lower the value of this indicator. A low value means that the selling pressure in the market is relatively weak, which can be regarded as a very effective buy signal. On the contrary, a rapid rise in the indicator indicates that the possibility of Bitcoin being sold off has increased. Therefore, this indicator can be regarded as an effective operation signal.

In the past few months, the total amount of stablecoins deposited in exchanges has increased significantly, which has led to the potential selling pressure remaining at a relatively low level since September. Although the selling pressure has increased slightly, the probability of a sharp drop is not high due to the low proportion of the previously mentioned whales in the market. Therefore, according to CryptoQuant, Bitcoin is likely to break through its historical high this year and reach the $20,000 mark.