Mining’s Longest Capitulation Since 2022 Signals Possible Bitcoin Rally Ahead

Bitcoin (BTC) has recently struggled to regain momentum, which remains in the consolidation phase just above the $60,000 key support. Despite reaching the highest in the past three months, the largest cryptocurrency saw a dip as low as $59,500 on Wednesday due to increased selling pressure from miners.

BTC Selling Spree

What’s going on a minerthe longest seen since the summer of 2022 before the FTX filing, shows the choking effect of the Bitcoin Halving.

Crypto analyst Ali Martinez noted that Bitcoin miners they have sold more than 2,300 BTC in the last 3 days, which is about $145 million.

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This sales pressure from miners adds to the latter The sale of BTC by the US and German governmentscontributing to the bearish pressure of the market and keeping prices within the lower range of the wide range of consolidation between $60,000 and $70,000 witnessed in recent months.

Notably, addresses linked to the German and US governments sent $737 million worth of BTC to exchanges, including Coinbase, Bitstamp, and Kraken, in various transactions.

Since i sales pressure since governments and miners decrease over time, market observers expect a possible price recovery of BTC, following the usual pattern seen during the post-Halving period, when new all-time highs are often reached.

Bitcoin Price Outlook

Market expert Scott Melker he points that the market may be approaching an important signal, meaning that if the daily candle closes below the level of $60,300, it may lead to a bullish divergence.

This will include the daily RSI (Relative Strength Index) from an oversold area, such as last August when the price was around $26,000.

Melker emphasizes the need to close below the specified level, followed by a clear rise in the RSI without execution low low low. It would take a significant drop for the RSI to drop below its June 24 level.

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However, crypto analyst Andrew Kang highlights the importance of the potential loss of the four-month range for Bitcoin, drawing parallels with the range seen in May 2021 following the parabolic rally of BTC and altcoins.

Kang notes that over $50 billion in crypto is currently at an all-time high, compounded by the fact that the market has been in an 18-week long consolidation phase without experiencing extreme washouts, as seen during the 2020-2021 bull market.

Furthermore, Kang suggests that initial estimates in the low $50,000s may have been too aggressive, and a more significant reset in the $40,000s is possible.

Such a reversal can have a significant impact on the market and will likely require several months of volatile or bearish price action before a reversal is detected and the price increases.

At the time of writing, BTC has regained the $60,350 level after briefly dipping below this key support for a further upward move.

The largest cryptocurrency in the market has erased all the gains in the broad periods, and is currently recording a 12% price drop in the monthly period.

Featured image from DALL-E, chart from TradingView.com