Bitcoin Miners Stop Selling – Is This the Bottom Signal?

[ad_1]

Given the dramatic escalation surrounding the Digital Currency Group (DCG), it does not seem out of the question that the price of Bitcoin will fall again. Despite today’s break above the important $17,000 level, a DCG bankruptcy and related Grayscale Bitcoin Trust (GBTC) breakup could have a major impact on the price, although it may be partially integrated.

However, a reliable indicator of previous bear markets, overall BTC miner activity shows that the bottom could be near if not already hit. The miners’ sellout that began in mid-December may be over for now.

According to data from Glassnode, the heavy selling pressure from miners that has plagued the market over the past 4 months has eased for now. The Bitcoin miner’s net position change is back in the green, meaning miners are once again accumulating instead of selling, as analyst Will Clemente pointed out.

Bitcoin miner net position change (7d moving average)

Another metric that signals that a bottom has already been reached is the Puell Multiple. The indicator looks at the supply of the Bitcoin economy and miners, and examines market cycles from the perspective of mining revenue. It is calculated by dividing the daily issue value of Bitcoins (in USD) by the 365-day moving average of the daily issue value.

With each cycle, a downward trend in miner income is formed. This trend is always broken shortly after the bottom of the BTC cycle. A look at the current chart shows that the breakout happened recently, suggesting that Bitcoin may have bottomed out at $15,500, according to analysis from CryptoCon.

Puell MultipleBitcoin: two or eight months of bear market ahead of you?

Jiang Zhuoer, CEO of mining pool BTC.top, today discussed his views on the current Bitcoin market cycle. According to Zhuoer, BTC may have bottomed in 2022 when the collapse of FTX caused the price to drop to $15,476. If so, all three bear markets would have taken similar time from the previous ATH to the low.

“The 4-year halving leading to the 4-year cycle law still seems unbreakable,” says the CEO. The analysis is also bolstered by the chart below, where Bitcoin has been consistently near the bottom after rising 66% in the 4-year cycle.

Halve the progress of 66%. #Bitcoin pic.twitter.com/D9vMriICvA

— Root (@therationalroot) January 7, 2023

Based on market sentiment observations, Zhuoer asserts that the market is in the final sideways phase of the bear market. “Events such as the DCG bankruptcy have already been factored in and would no longer have a material impact on the price.”

Zhuoer’s optimistic prediction is that if the current bear market and the 2018 bear market are similar, the price could skid for another two months before the start of the next bull market. The BTC.top CEO’s pessimistic scenario is that BTC faces another eight months of downward sideways movement, if the current market cycle is similar to the 2014 bear market.

Looking at Ethereum, Zhuoer concluded by stating:

I expect Ethereum (ETH) to start rising earlier than Bitcoin (BTC) as the leader of the next bull market. This should happen between March and May 2023, the price of ETH would definitely be out of the current low range.

At press time, the price of BTC was at $17,219, breaking above a three-week resistance level.

Bitcoin price (BTC/ USD), 4 hour chart

Featured image from Kanchanara/Unsplash, charts from Twitter and TradingView.com

[ad_2]