Bitcoin Price Surge to $69K Triggers Miners to Sell Off Older Block Rewards
In Brief
Bitcoin price recently rose to $69K, indicating the market influence of early miners selling their old block rewards.
The recent price movement of Bitcoin (BTC), resulting in surpassing its all-time-high peak of $69,000 and then subsequently falling to $62,000 following its swift rise over the last month, may indicate the influence of early miners selling their old block rewards, contributing to the pressure on Bitcoin’s price.
According to analysts from CryptoQuant, on-chain data indicates that just before Bitcoin peaked at new highs and then plunged, approximately 1,000 bitcoins, valued at around $69 million, were transferred to the cryptocurrency exchange Coinbase by more than a decade old addresses. Transferring long-dormant tokens to Coinbase is often considered a potential precursor to selling.
Given that the exchange order book reveals 5-10 Bitcoins of liquidity for every $100 price change, the potential sell-off of 1,000 Bitcoins is anticipated to prompt a notable price decline. This likelihood is heightened, particularly when traders are positioned to enter a short against Bitcoin’s all-time high, as observed earlier.
According to Bradley Park, an analyst at CryptoQuant, the recent surge in Bitcoin entering exchanges draws parallels to the significant increase in BTC inflows that preceded the 40% price drop on March 12, 2020. This drop coincided with the rapid escalation of Covid-19, prompting governments worldwide to implement lockdowns and leading traders to seek safety. Following the conclusion of that sell-off, Bitcoin reached its lowest point at $3,850.
Crypto Market Witnesses Liquidations
The Bitcoin price volatility resulted in significant liquidations of long positions on centralized exchanges, leading to liquidations totalling over $197 million in Bitcoin positions, with the majority, amounting to $108 million, coming from short positions, as indicated by CoinGlass data.
Considering a broader picture, the entire cryptocurrency market witnessed liquidations of over $383 million in long positions within the last 24 hours. This contributed to a comulative total of $678 million in liquidations across major centralized exchanges. Liquidations occur when a trader’s position is forcibly closed due to insufficient funds to offset losses. This occurs when market movements go against the trader’s position, depleting their initial margin or collateral.
Meanwhile, major altcoins, including Solana (SOL) and Ethereum (ETH), continued their upward momentum, registering daily gains of 2.5% and 3.5%, respectively. In contrast, the largest digital asset by market capitalization has decreased over 2% in the past 24 hours, presently trading at $67,245.
The recent Bitcoin price fluctuations reflect a dynamic interplay of market forces, illuminating the resilience and challenges inherent in the ever-evolving landscape of digital assets.
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Alisa is a reporter for the Metaverse Post. She focuses on investments, AI, metaverse, and everything related to Web3. Alisa has a degree in Business of Art and expertise in Art & Tech. She has developed her passion for journalism through writing for VCs, notable crypto projects, and scientific writing. You can contact her at alisa@mpost.io
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Alisa is a reporter for the Metaverse Post. She focuses on investments, AI, metaverse, and everything related to Web3. Alisa has a degree in Business of Art and expertise in Art & Tech. She has developed her passion for journalism through writing for VCs, notable crypto projects, and scientific writing. You can contact her at alisa@mpost.io
