This is why Bitcoin could see less selling pressure from miners – CryptoQuant

Bitcoin (BTC) may be seeing less selling pressure from miners in the near term due to increased profitability for this cohort of market participants and the recovery of its hashrate following the cryptocurrency’s recovery to the range of $69,000.

According to a report by CryptoQuant, the hashrate of the Bitcoin network rebounded while BTC had its latest rally. The metric’s drawdown from its all-time high is now 3%, compared to 8% on July 9.

Bitcoin Network Hashrate Recovers

On July 9, Bitcoin’s hashrate fell to its lowest level since February 28; however, at the time of writing, the rate had increased by 6% to 604 EH/s. Analysts at CryptoQuant say that a hashrate recovery is often associated with a sustained increase in the price of bitcoin.

The increase in hashrate of miners is accompanied by their increasing profitability. This cohort of market participants is now getting paid more than they have received since the Bitcoin halving in April. This is evident in the miner’s profit/loss sustainability metric, which measures the growth of miners’ income relative to the growth of mining difficulty.

The increased profitability of miners suggests that there could be less pressure to sell BTC because they would not have to offload their holdings to manage operating costs.

Bitcoin’s latest rally has also seen miners’ daily earnings rise by roughly 50%. Compared to an annual low of $22 million earlier this month, miners’ total daily earnings are currently around $32 million. In particular, higher incomes bolster Bitcoin’s hashrate recovery.

The biggest miners are hoarding BTC

As profitability and revenue increase, BTC outflows from miners have remained lower than earlier this year. When BTC rose to $70,000 in early March, daily miner withdrawals were between 10,000 and 20,000 BTC, and after the halving in April, the numbers remained high. However, outflows have dropped to 5,000-10,000 BTC in July.

It is worth mentioning that the largest Bitcoin mining entities have been increasing their holdings while smaller companies are selling. The total balance of large miners currently stands at 65,000 BTC, compared to 61,000 at the beginning of the year, while the balance of small miners has dropped from 59,000 BTC to 51,000 BTC in the same time period. Smaller miners have unloaded more of their bitcoins after the halving event.

CryptoQuant warned that miners could face the risk of staying at “depressed levels” in terms of fees because their profitability is too dependent on the price of bitcoin.

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