On May 24, the price of Bitcoin (BTC) dropped from $9,300 to $8,800. Over the next 24 hours, it dropped to a low of $8,600, leaving the top-ranked digital asset on CoinMarketCap at risk of further decline.
Bitcoin’s initial drop below $9,000 coincided with a massive influx of BTCs into the exchanges and chain data indicates that key players were selling over the weekend.
According to the data, miners, exchanges and retail investors may have been responsible for the decline in Bitcoin’s price over the past three days.
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Who’s selling Bitcoin?
As crypto currency investor Willy Woo explained earlier, the role of an exchange is to match orders between sellers and buyers. For example, if a buyer buys Bitcoin at $9,000, a seller has to be selling BTC at the same price for the transaction to go through.
Woo he said:
When we say that traders are „buying“ or „selling“, this is a myth. Every order is matched, every order has a buyer and a seller. (When we say the market is buying or selling, we really mean the smart money is buying or selling).
When miners sell the BTCs they mine and exchanges sell the commissions they generate, they put external selling pressure on Bitcoin.
According to CryptoQuant data, the inflow of Bitcoin increased to 2,435 BTCs on May 24. That’s approximately $22 million in BTC deposited at the exchanges in a single day.
The statistics show that the crypto currency exchanges probably did not count on the great selling pressure that occurred over the weekend.
For the exchanges to have led the decline, then the entry of BTC into the exchanges had to remain low. Cryptomoney trading platforms generate revenue through trade commissions, and an exchange can simply sell the commissions on its own exchange without moving large amounts of BTC.
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Those who remain are the miners and retail investors, and the chain’s data suggest that they were probably to blame for the massive sale on May 24.
Last week, ByteTree shows that the miners generated 5,231 Bitcoin Billionaire, Bitcoin Trader, Bitcoin Circuit, Bitcoin Era, Bitcoin Revolution, The News Spy, Bitcoin Code, Immediate Edge, Bitcoin Profit, Bitcoin Evolution and spent 5,846 BTC. In short, the miners sold 614 BTCs in addition to selling all the Bitcoins they mined in a seven-day period.
The miners are most likely behind the mass sale
For the large miners in Sichuan, China, the current rainy season will allow them to negotiate lower electricity rates. This means that some mining centers will be able to secure a rate of USD 0.03 / KW, which will reduce the cost of mining to approximately 6,000 dollars.
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However, for miners with excess debt or small-scale miners outside China, halving could have a significantly negative impact on their profit margins.
It is not yet clear whether the miners are selling more than they mine because BTC is above the price of mining cost recovery in China or whether the miners in debt are settling.
But, data shows that miners are likely leading the massive sale of Bitcoin in the $9,300 to $9,400 range, along with Coinbase retail investors moving to sell BTC.