Bitcoin prices fell sharply earlier this week, causing more than $300 million in crypto market liquidity in a single day. This episode has caused consternation in market circles and questions about the factors behind BTC's price decline.
Gayatri Choudhury, Quantitative Research Analyst at Bitwise, says there are two main factors driving this sell-off and neither is related to Bitcoin ETFs.
The analyst for the first time issued an opinion on Tuesday about the activity of Bitcoin miners. Since the fourth Bitcoin halving in April, the network's miners have consistently sold their BTC amid lower earnings and extremely high competition from global competitors.
“On June 9, more than 3000 BTC were transferred from the mining pool to Binance” said Choudhury. With reference to the CryptoQuant dashboard, the analyst stated that this kind of massive selloff tends to correlate with bearish price action, such as in mid-April after the halving, or in late May.
CryptoQuant published a report earlier this month that highlighted the aggressive selling trend of miners, giving credit in large part to BTC mining company Marathon Digital (MARA). The company sold 1400 BTC during the month of June, representing 8% of their entire BTC holdings.
CryptoQuant also noted that miners sold 1200 BTC via OTC on June 10, their highest daily volume since March. Regarding mainstream exchanges, Choudhury said more than $4.5 billion in assets were transferred from miners' balances to exchanges in June.
Regarding the drivers for their sell-off, Choudhury highlighted the miners' small profit margins since the halving. "Miners' gross income per terahash of energy invested has dropped by 56% since the halving," he said.
Adding to the market's anxiety was Monday's announcement from Mt. Gox confirmed that it will eventually refund Bitcoin customers. The exchange holds more than 141,000 BTC worth more than $8.5 billion, worrying investors who were expecting a sudden wave of BTC sales.
Despite the bearish effect of the selling pressure of Mt. Gox is yet to be seen, crypto investors are now looking forward to the launch of the Ethereum ETF in the United States in the same month. Analysts at K33 Research believe the ETFs will raise $4 billion in their first five months on the market.