Bitcoin (BTC) is showing a promising uptrend, edging closer to the $45,000 mark. This surge is largely attributed to a decrease in selling pressure, particularly from Bitcoin miners. These miners have scaled back their daily sales significantly, from over 800 BTC in late 2023 to below 300 BTC in early 2024.
This shift indicates a strategic change in the miners’ approach to their holdings. Major US publicly traded Bitcoin mining firms are reporting an increase in their BTC reserves, despite a notable dip in miner profitability – the most significant in over a year. Data from CryptoQuant suggests that Bitcoin miners have faced considerable underpayment. Yet, they prefer to hold onto their assets rather than sell.
Transaction Downturn and Declining Fees
Moreover, the network has experienced a downturn in transactions, dropping from a daily all-time high of 731,000 in late December 2023 to a three-month low of 278,000. This decline is mainly due to reduced activity in inscriptions and BRC-20 token transactions, especially those using taproot addresses, which have seen a 76% drop. As a result, Bitcoin transaction fees have steeply declined, dropping by 90% from mid-December to early February.
Bitcoin’s upward trajectory towards the $45,000 threshold is further supported by growing interest from large-scale investors, or “whales,” who are actively accumulating Bitcoin. Insights from the on-chain analytics platform LookOnChain highlight significant movements, including withdrawals totaling 2,741 BTC, worth around $118 million, from Binance, just ahead of the price hike.
Bitcoin Price Movement and Analyst Outlook
This easing of selling pressure and whale accumulation have collectively contributed to Bitcoin trading at approximately $44,451, marking a 3.61% increase over the past 24 hours. Prominent Bitcoin analyst PlanB offered an optimistic outlook, drawing attention to the increasing realized prices – a metric representing the average price at which Bitcoin has been historically traded. He posited that the current trend above these realized prices indicates a bullish momentum reminiscent of the early phases of previous bull markets.
