June has been a rough month for Bitcoin investors, with the price taking a nosedive. Here’s why:
Miners Sell-Off
Bitcoin miners have been selling off their Bitcoin at an alarming rate. They’ve sold over $2 billion worth of BTC in the past month, the fastest pace in over a year.
This sell-off is partly due to the recent halving event, which cut miners’ rewards in half. This has squeezed their profit margins, so they’re selling Bitcoin to cover costs.
Weak Miners Capitulate
Crypto analyst Willy Woo says that Bitcoin will recover once “weak miners die and hash rate recovers.” In other words, inefficient miners will go bankrupt, while others will upgrade their hardware.
Supply Barrier
Around 5.45 million addresses bought Bitcoin between $64,300 and $70,800. This range forms a significant supply barrier, meaning that if the price drops below this level, there will be a lot of sellers trying to offload their coins.
Short-Term Holders’ Realized Profit
Bitcoin has dropped below the short-term holders’ realized profit of $66,200. This means that many investors who bought Bitcoin in the past few months are now underwater. If the price doesn’t rebound soon, they may sell off their coins, further driving down the price.
What’s Next?
Bitcoin’s price could continue to decline if the selling pressure from miners and short-term holders persists. However, once the weak miners are gone and the hash rate recovers, Bitcoin is expected to make a strong recovery.
