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BTC fails to breach its $10,500 yet again for the third time in the last eight months. Major liquidation and miner inefficiency pull Bitcoin price lower.
Just after everything seemed to be going right on Monday, June 1, Bitcoin investors face another blow the following day. Bitcoin price tanked nearly 8% on Tuesday, with over $230 million on long and short positions liquidated on BitMEX on Monday.
Bitcoin’s Monday break-out above $10,000 levels remained short-lived even after some major consolidation seen around $10,200 for 14 hours. On Monday, as the BTC price surged over $10,000 levels the shorts had to bite the dust. However, the following day the longs were in the same position.
Massive volatility swept Bitcoin over the last week. Over the last 12 months, Bitcoin has struggled every time to form a strong base at $10,000 levels. But this has not deterred long-term investors to hold BTC in their kitty. The HODLing sentiment continues to remain strong despite this unprecedented volatility.
As per the Glassnode report, nearly 60% of Bitcoin’s supply hasn’t changed hands over the last year.
60% of the #Bitcoin supply hasn't moved in over a year, showing increased investor hodling behaviour.
Last time we saw these levels was right before the $BTC bull market of 2017. pic.twitter.com/mRXQmhUzGu
— glassnode (@glassnode) May 29, 2020
Not Only Liquidations on BitMEX Hurting Bitcoin Price
While we might be thinking that the BitMEX liquidation is the reason behind the price crash, some other analysts have a few more inputs to add.
Ki Young Ju, CEO of CryptoQuant said that capitulation by an unknown mining pool caused the latest BTC price dip. As per Young Ju, the miner who produced 51 blocks in the last four days has been capitulating.
Significant outflows from the unknown miner before the dip. They're CAPITULATING.https://t.co/WVdBy1t17E pic.twitter.com/1LQeLYpY6X
— Ki Young Ju (@ki_young_ju) June 2, 2020
Speaking to Cointelegraph, Young Ju said that the unknown largest mining pool has moved 12,571 BTC out of its treasury. He added:
“They [mining pools] don’t move Bitcoins unless they decide to sell it. Each miner has a different wallet management system. Major mining pools send BTC to exchanges periodically, and the largest unknown mining pool, they only move their Bitcoins when the BTC price reaches the top.”
This same mining pool has now moved thousands of Bitcoins. While this might not be capitulating, it shows that miners are looking to liquidate their inventory soon as they find attractive prices. After the latest Bitcoin halving last month, block rewards have been cut into half. This has severely impacted the profitability of miners.
In the last eight months, Bitcoin has tested the $10,500 resistance three times. This was its second time with the first one being in February 2020. Well, it looks like Bitcoin investors have still some catching up to do here to set up a convincing breakout and bull trend.