Bitcoin miners have been identified as key players in the recent market downturn, as they engaged in intense selling following the latest halving event earlier this year, which reduced mining rewards from 6.25 BTC to 3.125 BTC.
However, recent data suggests that the selling pressure from these entities has significantly diminished. This trend could potentially boost the asset’s price and trigger a surge in the overall market.
Miner selling pressure weakens
The recent bearish market conditions have dampened earlier optimism and enthusiasm surrounding Bitcoin’s price, indicating that the market may have reached a bottom. Particularly after the halving on April 20, miners began offloading their BTC as the reduced mining rewards made older mining equipment unprofitable, leading to a decrease in their activities.
However, the latest analysis from CryptoQuant indicates that the market is currently absorbing this selling pressure, as evidenced by the rapid decrease in the amount and quantity of Bitcoin moved out of miner wallets.
The decline in selling pressure suggests that the market may stabilize, and if the current selling volume is fully absorbed, it could pave the way for another upward movement. A positive trend is expected in the cryptocurrency market in the third quarter of 2024.
“In other words, the selling pressure from miners is weakening, and if all their selling volume is absorbed, it could create a situation for another upward rebound. A positive trend is expected in the cryptocurrency market in the third quarter of 2024.”
Artificial intelligence and Bitcoin mining
It has been two months since the Bitcoin halving event, and businesses involved in generating new Bitcoin have faced a significant decline in profitability. Due to the recent reduction in block rewards, some operators are facing financial pressures, while others are actively seeking exit strategies.
As a result, an interesting trend has emerged this year. There is a rapid convergence, financing, and collaboration between artificial intelligence and Bitcoin mining businesses, as the former sees increased demand for computing power, while the latter seeks new ways to maximize returns on their substantial capital investments.
This week, popular Bitcoin miner Core Scientific announced an expanded partnership with CoreWeave. CoreWeave is a startup supported by Nvidia and a leading technology provider for running artificial intelligence models. As part of the deal, Core Scientific will provide 70 megawatts of computing infrastructure to support CoreWeave’s operations.
Prior to this, another notable company in the field, Hut 8, revealed that it had secured $150 million in debt from private equity firm Coatue to help develop its portfolio of artificial intelligence data centers.