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Bitcoin miners selling their coins as analysts warn of a profit-taking period

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12
Feb
  • Bitcoin miners are selling off their crypto, with a new report showing that for the first time since November, their net position is negative.
  • Analysts are warning that we may be in a profit-taking period that could drag BTC back to $40,000, and if it breaches this support, we could be in a freefall.

Bitcoin is trading just above $42,000 today after a 3 percent drop in the past day. However, according to analysts, we may be heading for a bigger dip in the coming weeks as more traders liquidate their positions and take profits. Miners are not helping either, with most of them selling their newly-minted coins. Data shows that for the first time since November, miners’ BTC positions are net negative.

At press time, Bitcoin was changing hands at $42,076, down by 2.95 percent in the past 24 hours. In that time, it has set a high of $43,810 and conversely, dipped below $42,000 slightly. Being the weekend, trading volume is down by 29 percent to stand at $24.9 billion.

According to a report by Delphi Digital, the top crypto is heading to a confluence of daily, weekly and monthly resistance. This, according to the firm’s analysts, indicates a possible near-term price ceiling.

As such, it presents “a logical place to expect profit-taking/risk reduction activity due to the confluence of resistance zones and the speed and magnitude of the move off recent lows.”

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It’s critical for BTC to hold its support above $40,000 or it risks a dip into its next support level which stands at $38,500, the analysts believe. If it were to breach this support level, BTC will be heading into freefall.

Popular Twitter trading expert Crypto Ed NL concurs, saying he’s waiting for the move towards $40,000. Anything below this level and it’s the bears who will be in charge.

Also Read: Bank of America says Bitcoin is more like a risk asset than a hedge against inflation asset

Bitcoin miners selling their crypto

In more bearish news, data shows that Bitcoin miners are not as confident that Bitcoin will chart higher, with most selling their newly-minted coins.

Data by Glassnode shows that a metric tracking miners’ BTC holdings turned negative for the first time since November last year. This, Glassnode says, could be a sign that the smaller and less efficient miners are getting short-squeezed, and this trend will only rise in coming weeks.

For context, BTC miners have been adding onto their positions even when the price dipped to about $30,000 in January.

The publicly-listed miners are not worried about this trend, however. One of these is Marathon Digital, which is headed by Fred Thiel and whose stock has rebounded by 40 percent since the January crypto dip pulled it down.

A spokesperson for the company told Bloomberg:

We started hodling in October 2020, and since then, we have not sold a single satoshi.

Sue Ennis, the head of investor relations at Hut8 Mining, another listed miner, stated:

We are believers in Bitcoin. Some miners sell Bitcoin or use it to pay expenses. We hold or ‘hodl’ ours.

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