BTC miners are selling at a level not seen since July 2019, when the price of Bitcoin reached $14,000.

According to CryptoQuant data, the miners seem to be selling large quantities of Bitcoin (BTC). Historically, the increase in sales pressure from miners has marked a local high, leading to sharp and prolonged corrections.

Why are the Bitcoin miners selling?
In May 2020, chain analyst Willy Woo said there would be two sources of unparalleled sales pressure on the market after the block’s reward was halved (halving event).

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Woo pointed to Bitcoin miners and crypto-currency exchanges selling the commissions they earn in the form of crypto assets as the sources of selling pressure. He said that:

„There are only two unparalleled selling pressures in the market. (1) Miners diluting supply and selling into the market, this is the hidden tax through monetary inflation. And (2) the exchanges that tax traders and sell in the market.“
Therefore, in the short and medium term, miners could continue to serve as a major source of selling pressure on Bitcoin.

According to CryptoQuant data, the miners‘ positioning index (MPI) has increased significantly in recent days.

Bitcoin miners‘ positioning index (30 days) Source: CryptoQuant
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On January 10, the MPI reached a level that is on par with that of July 2019, when the price of Bitcoin fell rapidly below $14,000. Ki Young Ju, the CEO of CryptoQuant, said:

„The positioning index of the miners seems to be sufficient to make a local maximum. They are selling $BTC. I’m going to put a small short position to sell $BTC in this short term bear market. Since December last year, they had been selling $BTC, but the correction was small due to institutional buying power“.
Ki then pointed out that he short during the speculation (or scalp), emphasizing that the correction was short lived.

It is possible that demand from US buyers is overwhelming miners‘ selling pressure. This theory is supported by the recent trend of Bitcoin price trading at a higher premium on Coinbase than other exchanges such as Binance.

What do traders expect in the short term?
Some traders expect the price of Bitcoin to fall further in the short term. Edward Morra, a crypto currency trader, said a slow correction of around $36,000 is a possible scenario.

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Morra noted that the scenario of Bitcoin falling to $36,000 is unlikely, but would be a „typical bull market thing. He wrote:

„I think it’s an unlikely scenario, but I see some similarity to the transition from Sunday to Monday last week. By the way it is very bullish to set a week low on Monday and then expand, it is a typical bull market thing“.
Philip Swift, the creator of LookIntoBitcoin, said that while it’s unlikely that Bitcoin will see a 30% decline, the rate of appreciation could slow. This could lead to a slower momentum for the price of Bitcoin, especially when it tests the $42,000 resistance level again in the near future. He explained:

„A clarification, as there seems to be some misinterpretation. I don’t believe that BTC is about to fall by 30% or more, I believe that the rate of price appreciation may decrease in the short term“.