Long-term bitcoin holders and miners have been significant sellers of the cryptocurrency in the past two weeks with little indication of renewed buying interest. This trend has been observed through a decrease in UTXO age bands, indicating increased selling activity.
According to on-chain analysis firm CryptoQuant, wallets belonging to whales, which are large holders of the token, have sold over $1.2 billion worth of BTC in the last two weeks. Instead of selling on the open market, these whales have likely used brokers to execute their transactions. Analysts from CryptoQuant noted that traders are not increasing their Bitcoin holdings, and the demand from whales is lacking strength. Additionally, stablecoin liquidity has been growing at the slowest pace since November 2023.
The decline in UTXO age bands tracked by CryptoQuant corresponds with the drop in BTC prices from over $70,000 in late May. UTXO age bands are used by traders to monitor buying and selling patterns in the market. A decrease in UTXO age usually indicates increased selling activity, while an increase suggests more holding in the market.
Market observers suggest that miners may be turning to the AI sector instead of Bitcoin due to diminishing mining rewards post-halving. Both industries rely heavily on powerful computing chips, which miners already possess. This shift towards AI businesses could be contributing to the increase in selling activity by miners.
Since June 5, BTC prices have fallen from $71,000 to just over $65,000 as of Wednesday. This decline has been attributed to a strong dollar, a flight away from riskier assets, and growth in traditional stock indices. Additionally, U.S.-listed ETFs tracking Bitcoin recorded net outflows of over $600 million last week, marking their worst performance since late April.
Some traders have warned that BTC prices could drop as low as $60,000 in the absence of significant growth catalysts. Currently, BTC is down 0.6% in the past 24 hours, while the CoinDesk 20 index, which tracks the largest tokens, is up 1.2%.
In conclusion, the recent selling activity by long-term holders and miners, coupled with the shift towards the AI sector by miners, has contributed to the downward pressure on BTC prices. Traders are closely monitoring market dynamics for any signs of renewed demand or growth catalysts that could potentially reverse the current trend.
