As bitcoin miners started bringing the largest amount of bitcoin to the market since October 2020, the price of bitcoin on the 26th, in the U.S. perspective, once fell 10%.
Institutions are thinking that they will not buy until the biden administration’s stance on bitcoin and cryptocurrency becomes clearer, so there is no market demand to handle the pouring volume.
According to the CoinDesk Bitcoin Price Index (BPI), the price of bitcoin remained around $32,000 throughout the day, trading at around $31,800 at 5pm. By midnight the previous day, it fell to the level of 30,000 dollars.
Pouring property
According to data from on-chain analytics company CryptoQuant, the Miners’ Position Index (MPI) rose to its highest level in eight weeks last week, and is still above 2.0.
The Miner Position Index is the ratio between the number of Bitcoins exiting the wallet of all Bitcoin miners and the annual moving average of this number. If Bitcoin’s miner position index is 2.0 or higher, it means that most miners are selling bitcoins.
One of the reasons miners have turned to bitcoin sell-off is to cover operating costs.
“As expected after the bull market last October, miners are trying to secure cash by disposing of a significant amount of assets in a very long time. more
In a situation where you need to invest capital in a lot of (and new) mining equipment, you can sell your bitcoins 30 to 60 days after the Chinese rainy season at a price 3 to 4 times higher than when they were mined and cash Securing is the most ideal situation for miners.” – Neil Van Huis, Director of Sales and Institutional Transactions, Blockfills
Insufficient demand
As such, miners continue to sell bitcoins, but the demand to buy bitcoins in the market is insufficient. In particular, there is insufficient demand from the institution.
According to Cryptoquant data, there seems to be no room for a rebound since Coinbase Premium fell to negative last week and has not been able to steadily stay above $50 so far.
Coinbase Premium is an indicator of the difference between the bitcoin price on the Coinbase exchange expressed in US dollars (USD) and the Bitcoin price on Binance exchange expressed in the stablecoin tether (USDT).
According to Cryptoquant CEO Joo Ki-young, Coinbase premiums generally exceed $50 when Coinbase’s spot demand is strong. The lower coinbase premium means that there is no demand to buy spots with dollars.
Meanwhile, looking at CryptoQuant’s tracking data, the amount of stablecoins registered on all exchanges has hit a record high. Along with this, the lack of demand for spot payments in dollars shows that cryptocurrency specialized institutions such as cryptocurrency hedge funds and market makers dominate the market.
As CEO Joo said, cryptocurrency-related institutions that are relatively unwilling to buy and sell bitcoins with stablecoins are leading the market. In response, the main representative “Without spot dollar demand, there is no more bull market”Said.
The institution is a waitress?
The agency is in a position to stop buying bitcoins and watch until the newly inaugurated Biden administration’s cryptocurrency policy and regulatory stance become more clear. As the new Finance Minister Janet Yellen made negative comments on cryptocurrency, there has also been growing concern that regulations on the cryptocurrency market may be tightened.
Guy Hershey, managing director of asset broker eToro, said, “Institutions are still grasping the Biden administration’s stance on cryptocurrency.” “Unless the Biden administration’s position is very negative, so cryptocurrency “If concerns about a strong regulation or a full ban on the government disappear, institutions are expected to be swamped.”
Gamestop stocks and Bitcoin soaring
Some individual investors are hoping that a situation like the high volatility of GameStop’s soaring this week will not happen with Bitcoin. Adam James, senior editor of OKEx Insights, a research division of the cryptocurrency exchange OKEX, said, “Reddit and Discord users have increased their gamestop stock price by more than four times, halting the short selling forces. “
“I think the bitcoin and cryptocurrency markets can be affected as people realize that the traditional market is also different from what it used to be, as’Zipcock’ has become a new everyday life (because of the pandemic). Of course, that doesn’t mean that it will lead to a strong cryptocurrency market.”
Accordingly, some traders and analysts remain optimistic in the long run despite price volatility in the short term.
Bendick Norheim Skei, who leads the research division at Norwegian cryptocurrency analyst Arcane Research, said, “Some are losing trust in bitcoin as bitcoin fails to recover to its previous high, but later this year we regret thinking that way. I will do it.” He continued, “Bitcoin is highly volatile, and high volatility is an inevitable fate for emerging assets.”
Chris Thomas, head of the digital assets division at Swissquote, said the support sentiment for Bitcoin at the moment remains at the $30,000 mark, highlighting the price at which demand was formed at a’pretty good’ level earlier.
“It makes no sense to sell bitcoins at the current market price, the less speculative investors are.”
· Translated by NewsPeppermint.
For reports and press releases, [email protected]