Bitcoin Miners' Sales Decline as Transaction Fees Drop, CryptoQuant Reports

Bitcoin Miner Selling Pressure Eases Amid Declining Transaction Fees, CryptoQuant Finds

Feb 10, 2024
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Market analysis reveals a significant decrease in daily BTC sales by miners alongside a plunge in transaction fees, signaling shifting dynamics in the crypto landscape.

A recent on-chain analysis conducted by market intelligence platform CryptoQuant has uncovered a notable easing in selling pressure from Bitcoin miners amidst a significant decline in Bitcoin transaction fees.

Despite the market's fluctuations, the latest findings from the firm's weekly report indicate a considerable drop in daily Bitcoin sales by miners, currently hovering around 300 BTC. This figure starkly contrasts with the 800 BTC daily sales observed in November and December 2023.

Throughout 2024, Bitcoin miner selling pressure has remained subdued as major publicly traded mining entities focus on replenishing their BTC holdings. This strategic accumulation comes at a time when miner profitability is experiencing its most substantial decrease in at least a year.

Analysts at CryptoQuant emphasize the sustainability of miner profit/loss metrics, highlighting that mining firms have encountered significant underpayment in 2024 due to reduced transaction activity on the Bitcoin network. Notably, Bitcoin's daily transaction count has plummeted to a three-month low of 278,000, marking a significant decline from December's record high of 731,000.

The decline in Bitcoin transactions is attributed to decreased activity from Ordinals inscriptions and BRC20 tokens, as evidenced by a 76% plunge in transactions using taproot addresses since December. This downturn in transaction activity has directly impacted Bitcoin transaction fees, which have plummeted by 90% from December 15 to February 5, reaching a daily total of 53.

Despite the easing of miner selling pressure and a reduction in downward pressure on BTC's price, derivative markets indicate a continued dominance of sell orders. However, recent days have seen a notable increase in BTC's price, with the asset even approaching the $48,000 mark on Friday.

This analysis contrasts with a recent report from Bitfinex, which attributed the latest BTC price plunge to a selling spree among Bitcoin miners. Bitfinex suggested that miners are liquidating their BTC reserves to raise capital and upgrade infrastructure ahead of the impending Bitcoin halving event.

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