Let's figure out where they might find coins to dump. A 🧵
Bitcoin miners spend money to run facilities. The lower BTC goes, the more they have to sell to break even. Even those who stacked BTC during the bull have to unload their holdings at some point. That's called miner capitulation, and we're getting
close to it now.
Miners have been piling in since the end of summer 2022. They might have been hoping for a rebound. However, the recent price action will likely put some of them out of business, setting the stage for a BTC sell off.
Interestingly, miners unloaded some BTC in spring 2022, just before it crashed to 20,000. A smart move, indeed.
Still, they have been selling since the start of August. Remember: the lower BTC costs, the more coins miners have to sell.
Will it lead to a prolonged sell off? Not necessarily.
The 1Yr+ HODL Wave, which indicates the percentage of holders holding BTC for over a year, has reached its highest number, indicating that a bottom could be approaching.
Once the inefficient miners are gone and BTC difficulty adjusts to accommodate the lower hash rate, the surviving miners will likely start to accumulate again.
In June, @probtctrader predicted that the total crypto market cap would test the psychologically important 1 trillion resistance level at some point. And this is precisely how things played out; the market has now retreated from that level.
The total crypto market cap chart tends to gravitate toward the 500 million mark.
A bearish MACD divergence on the higher timeframe and a head and shoulders pattern also point to the total market cap going down to 500 million.
That will likely be the market's absolute bottom.
The levels to watch out for are:
BTC/USD: 14,000 and 9,000 ETH/USD: 500
If you want to learn more, check our latest Crypto Market Roundup below.
This post is based on this twitter thread.