Well-known on-chain analyst: Even if Bitcoin miners sell for profit, it cannot prevent the next bull market

Historical data shows that some miners began selling Bitcoin (BTC) in late July, which led to increased selling pressure in the cryptocurrency market.

Finally, Bitcoin began a sharp decline starting in mid-August, falling 13%, and has been struggling to reclaim the $12,000 mark since then.

Bitcoin sold by miners, 2017-2020. Source: CryptoQuant

According to Ki Young Ju, CEO of CryptoQuant, continued selling by miners may not be enough to stop the bull run. The on-chain data analysis company closely monitors the activities of miners and whales because they hold large amounts of BTC.

On-chain analyst Willy Woo explained that miners are one of the two external sources of selling pressure on Bitcoin. He previously said:

“There are only two unparalleled selling pressures on the market. (1) Miners who dilute supply and sell on the market, which is a hidden tax caused by inflation. (2) Exchanges who tax traders and sell on the market.”

When miners start selling their Bitcoin holdings, which are usually used to pay fees, it can trigger a correction in the cryptocurrency market.

For example, from August 17 to September 5, the price of Bitcoin fell from $12,486 to $9,813. During this period, several whales sold Bitcoin at $12,000, and the same behavior was found among miners.

Selling pressure from miners and whales is clearly attributed to the current crypto market downturn, but Ki explained that in the long run, it will not be enough to prevent a secular bull run from occurring.

If miners suddenly sell a large amount of Bitcoin, this could cause a severe pullback, as small price fluctuations could trigger liquidations for highly leveraged traders. Therefore, in theory, even a small amount of miner selling could cause a large price movement.

Ki said that the selling by miners is not strong enough to prevent a future bull run. He said:

“Some miners started selling in late July, but I don’t think the amount of Bitcoin that miners are selling will be enough to stop the next bull run in the long run.”

According to ByteTree data, Bitcoin miners’ net inventory has decreased by 125 BTC per week over the past 12 weeks. The data shows that miners sell about $1.362 million worth of BTC per week.

Number of BTC mined and sold in the last 12 weeks Source: ByteTree

As Ki highlighted, the data showed that miners sold a large amount of BTC, but in amounts that did not match normal behavior.

A post-halving bull cycle is still possible

Despite multiple attempts by bears to sink the price below crucial levels, Bitcoin is still hovering above the key technical support of $10,000.

Bitcoin’s resilience amidst massive selling pressure suggests a cautiously bullish trend in the long term.

Bitcoin short-term holders NUPL Source: Glassnode

Several on-chain indicators also suggest that now is the time to accumulate Bitcoin. Rafael Schultze-Kraft, CTO of Glassnode, said:

“In my opinion, the short-term holders’ unrealized net profit/loss (STH-NUPL) is a bullish signal. The rebound from the 0 line is very important and is a typical feature of the previous bull market. Historically, it is a good buying opportunity.” (Cointelegraph Chinese)