The quant explained how a Bitcoin rally is possible in the third quarter of 2024 as the miner selling pressure has disappeared.
Bitcoin miners seem to have stopped their sales
In a CryptoQuant Quicktake post, the analyst talked about how concerns of selling pressure from miners have been resolved recently. There are two on-chain indicators to focus on here.
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The first of these is “Mining Operations Exchange,” which, as its name suggests, tracks the total number of transactions from wallets associated with miners to those associated with exchanges.
If the value of this metric is high, it means that the miners are making a high amount of deposits in the exchange. Generally, the main reason why these chain validators would transfer their coins to these middlemen is for trading related purposes.
As such, this type of trend can have potential bearish effects on the market. The low values of the index, on the other hand, may be neutral or at a high level of the asset, as it suggests that the miners may not participate in any sales through these platforms.
Now, here is a chart showing the trend in Bitcoin Miner to Exchange Transactions over the last year or so:
As seen in the graph above, Bitcoin Miner to Exchange Transactions have been increasing between the end of 2023 and the end of April of this year. This increase in the metric happened as the price of the cryptocurrency itself has been going through a rally.
It seems that the miners saw this rally as an exit opportunity, as they gradually increased their selling pressure as the price moved towards a new all-time high (ATH).
It also appears, however, that since the peak in April, the value of the index has seen a very rapid decline. Therefore, it is possible that miners’ desire to sell has decreased.
Exchanges are not the only way miners trade, however, as over-the-counter (OTC) desks are also a popular option among these on-chain validators. Below is a chart showing the trend in Total OTC Desk Balance, which is an index that tracks the non-exchange and non-exchange wallets that miners send to when they want to sell.
From the graph, it can be seen that the Total OTC Desk Balance was at a very high level prior to that, suggesting that these businesses that may be OTC desks were holding a large amount of coins.
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In the past few days, however, the index has seen a sharp drop, which could mean that the coins that have been piling up in these wallets have now found a buyer.
Therefore, it seems that miners have eased the selling pressure on exchanges and the coins they were expecting to sell on OTC desks have also now been withdrawn. “Enough conditions have been created to continue the rally again in the third quarter of 2024,” notes the value.
BTC price
Bitcoin has shown some recovery in the last 24 hours as the price of the asset is now back above $63,700.
Featured image from Dall-E, CryptoQuant.com, chart from TradingView.com
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