Here’s why Bitcoin price may drop 10% next week

Here’s why Bitcoin price may drop 10% next week
  • Bitcoin miners moved thousands of Bitcoins to exchange platforms, most likely for selling purposes
  • Bitcoin price has now moved towards the $9,000 support again, threatening to break a 1-month range
  • Sellers will be targeting a move to $8,300, if $9,000 gives way

Bitcoin price is testing support around the $9,000 mark after miners moved thousands of Bitcoins to exchange wallets. Moreover, a few thousand more of Bitcoins were transferred through over-the-counter (OTC) deals. 

Fundamental analysis: Miners on the move

Bitcoin miners moved 2,650 BTC (approximately $28 million) to exchange wallets, most likely for selling purposes. In addition, it is estimated that a few thousand more Bitcoins were transferred through over-the-counter (OTC) deals. 

This is the largest direct transfer of Bitcoin from miners to exchange platforms for more than a year, as reported by Glassnode.

The majority of 2,650 BTC was transferred to the Bitfinex crypto exchange. Large transfers, like this one, usually signifies the beginning of a bear cycle as miners look to sell.

In the past, extensive transfers to crypto exchanges have happened after a sharp decline in Bitcoin price, opening a bear cycle. However, it’s still early to say if this transaction will have the same effect. 

The analysis from Glassnode didn’t cover the OTC deals, which are more common for mining pools based in China. Still, other data suggest that miners may intend to sell large amounts of Bitcoin. 

Cryptoquant, a data provider, pointed out that over 9,000 BTC (approximately $86 million) was transferred on Tuesday, according to Invezz. The last time miners moved Bitcoin amounts of this scale was in December 2019, when around 14,800 BTC was transferred. 

As for the recent transfers, the largest part of them was moved through mining pools Poolin and Haobtc as around 7,100 BTC was moved between the pools. 

Technical analysis: Price testing support 

After Bitcoin price surged to $9,800 on PayPal and Venmo reports, the buyers have failed to sustain the positive momentum. As a result, the price action is trading near the lower end of a range again. 

Bitcoin (BTC/USD) daily chart (TradingView)

Bitcoin price has spent most of June trading between $9,000 and $10,000. The buyers failed to clear the $10,000 resistance on two occasions. This has now provided an opportunity for sellers to break $9,000 support. 

The next stop lower is $8,300, an area that hosts two important moving averages, and an attractive opportunity for traders looking to invest in Bitcoin

Summary

Bitcoin price has moved lower to test the support around $9,000 after it emerged that miners moved 2,650 BTC (approximately $28 million) to exchange wallets. In the past, actions such as this usually led to bear cycles as the sellers eye a move to $8,300. 

By Michael Harris
Specialising in economics by academia, with a passion for financial trading, Michael Harris has been a regular contributor to Invezz. His passion has given him first hand experience of trading, while his writing means he understands the market forces and wider regulation.
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