Bitcoin saw more upside potential as the king coin surge past the $23k in the wee hours of 24 Jan. According to experts, this surge comes at a time when miners sales are at three year lows.
“Miners are also in better shape. Selling is now at a three-year low,” Bitfinex analysts stated. “It is a potential indication that miners are now either already transitioned or in the process of transitioning to a source of buying pressure.”
“Miners are holding their bitcoin because they anticipate further rises,” they added.
Any blockchain network may contain miners, which are businesses that provide their computing resources in exchange for token-based “rewards.”
Miners sell these incentives repeatedly to cover their comparatively high operating costs. A few miners filed for bankruptcy last year and liquidated their assets, which intensified market selling pressure.
Declining miner sales indicate weaker selling pressure from those responsible for making coins and are generally considered bullish.
That being said, the typical macroeconomic uncertainties and the ongoing issues surrounding DCG and Grayscale might dampened investors mood and the sustainability of the recent price rally.
With the price resurgence, investors might be tempted to use the current price level to exit and gain liquidity, especially after the prolonged and difficult bear market that ended in 2022, as Glassnode noted in its report.
The prominent on-chain analysis firm evaluated whether Bitcoin’s recent bounce last seen before the FTX saga is a bull trap or whether a fresh bull run is actually imminent.
The Holy Grail For A Bitcoin Bull Run Is Near?
The market has transform to a “regime of profit supremacy” in response to last year’s catastrophic events, that caused the majority of investors to experience a loss.
According to Glassnode, this is “a good sign of healing following the heavy deleveraging pressure in the second half of 2022.”
Nevertheless, the risk of a worst-case scenario with the liquidation of Grayscale’s Bitcoin Trust [GBTC] with over 630k BTC still looms large.
After Genesis filed bankruptcy, parent firm DCG and its other subsidiary Grayscale are on shaky ground. Investors are now pinning hope on Grayscale’s legal battle with the SEC.
At best, if the first Bitcoin spot ETF [an investment vehicle for institutional investors] gets the green signal, this could be “the holy grail for a Bitcoin bull run”.