Bitcoin Undergoes Price Correction on News of Miner Outflow Reaching 5-Month High September 14, 2020 September 14, 2020 Kelly Cromley http://1AZFjzw2#Nwf63pYaMWq#xIY
Bitcoin NewsSeptember 14, 2020 by Kelly Cromley

Bitcoin Undergoes Price Correction on News of Miner Outflow Reaching 5-Month High

Bitcoin’s (BTC) price fell from $10,580 to a low of $10,258 a few hours back, reflecting a drop of 3% in a matter 6 hours after on-chain data signaled the likelihood of a miner sell off.

At the time of writing this article, Bitcoin was trading at $10,347. All through last week, on chain analysts have stated that miners have been disposing comparatively huge quantity of BTC.

Other than cryptocurrency exchanges, miners are regarded as formidable in terms of their selling pressure. Therefore, transfer of Bitcoin by miners is closely monitored as it can cause huge downward pressure on price.

Many reports a week back suggested that miners are moving Bitcoins out of their ecosystems. Ki Young-Ju, the CEO of the analysis company, said:

“As I know, some Chinese miners already realize their mining profitability (return on investment), and they might not want new mining competitors joining the industry because of the bull market.”

In the meantime, as per Glassnode, an indicator that reveals the capital inflow from miners to exchanges just shot up to a five month peak. The earlier surge was seen in mid-August when Bitcoin price reached its 2020 peak of more than $12,000, which was quickly followed by a reversal towards $10,000.

Usual sell offs enable miners to cover costs involved in running huge mining facilities. Glassnode stated:

If Bitcoin rebounds quickly from reversals sparked by miners sell off, it would signal considerable demand from retail investors trading on exchanges. On the contrary, if Bitcoin continues to decrease, it would indicate that there is not adequate demand to nullify the selling pressure. In the near-term, traders are slightly cautiously bullish in spite of the resistance faced by Bitcoin at the $10,500 zone.

The trader has opined that breaching such a key resistance level at the first instance is unrealistic. A minor resistance is also possible considering the historical importance of the level. A pseudonymous trader referred to as “Byzantine General” stated that near-term liquidations of contract happened after the bounceback to $10,500. In the days ahead, the trader anticipates a bounceback or small decline to $10,100, detailing:

Scott Melker, a renowned crypto trader, stated that the $10,500 level is a key resistance for Bitcoin. Taking into account the importance of the resistance level, the trader stated that it is not possible to lead to notable reversal. Melker stated:

In the meantime, in the recent technical analysis pertaining to Bitcoin, trader Michael van de Poppe has underlined the level as a crucial resistance to be broken in the near-term. Nevertheless for the bullish trend to continue, earlier resistance levels must be piloted and affirmed as fresh support before going higher, he details:

Van de Poppe said “On the upside, if the price of Bitcoin breaks through the $10,450 level, the potential and crucial pivot is structured between $10,900-11,000.”

AuthorKelly Cromley

Kelly is our in house crytpto researcher, delving into the stories which matter from blockchains being used in the real world to new ico coming out.