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Bitcoin (BTC) demand has slowed, and CryptoQuant analysts observed a significant increase in miners’ selling activity last month. Analysts noted that this situation potentially exerted downward pressure on the price of the largest cryptocurrency.
Miners Respond to Decreasing Revenues
Since the completion of the fourth block reward halving on April 19, the block reward for Bitcoin miners dropped by 50% to 6.25, leading to a significant decrease in their revenues. In response to this revenue drop, miners increased their sales, sending large amounts of BTC to spot exchanges. This supply flow disrupted market balance and heightened concerns about a decline.
CryptoQuant’s research director, Julio Moreno, highlighted the growing imbalance between BTC supply and demand. He noted that the total BTC balance on over-the-counter (OTC) desks began to increase as the largest cryptocurrency peaked at $73,750 in mid-March. Since then, the OTC supply has continued to rise, reaching its highest level since November 2022, while demand has decreased.
CryptoQuant analysts also pointed out a slowdown in demand from permanent investors, who buy BTC without the intention to sell. The monthly demand from this sector has dropped by 50% since the end of March, signaling a significant slowdown in investor appetite for Bitcoin.
Similarly, demand from large investors and Bitcoin whales has also decreased, dropping from a 12% peak at the end of March to currently 6%. Spot Bitcoin exchange-traded funds (ETFs) in the US also experienced significant outflows against minimal entries, indicating a decrease in investor sentiment.
Market Outlook and Price Forecast
BTC has dropped below $60,000, marking its lowest level in two months. Analysts now expect the largest cryptocurrency to target the $55,000 to $57,000 range in the short term. This range corresponds to a 10% drop from the current cost base of $63,000, and Bitcoin has nearly met this expectation by pulling back to $56,800.
Finally, following employment data from the US on May 3, Bitcoin quickly surged back above the $60,000 threshold. At the time of writing, it is trading at $63,830. Experts agree that maintaining this upward momentum requires a weekly close above the $60,000 threshold. If the price demonstrates this strength, a decrease in selling pressure and a resurgence in demand are anticipated.
