On Friday February 9th, the first cryptocurrency broke through $47,000, which is the highest since January 12. According to our experts, the value of BTC is rising because the sale of Bitcoin by miners is reduced. In the weekly report, analysts emphasized that miners have virtually stopped selling recently. The daily rate dropped from 800 BTC per day to less than 300 BTC.
In addition, the Bitcoin network is experiencing a sharp decline in transactions. The number of transfers fell from a daily record high of 731,000 in December 2023 to a three-month low of 278,000. The reason is the extinction of the excitement around the ordinals protocol “inscriptions” and BRC-20 tokens.
Due to the fall in the number of transactions, commissions have also decreased. Since mid-December they have fallen by 90%. Despite the decline in profits, miners now prefer to hold on to their assets rather than sell further. Previously, Bitfinex analysts blamed miners for the decline in the price of BTC. However, they have their own reasons for this, including upgrading equipment before the halving.
What else is pushing BTC up?
Since the end of January, the sale of the Grayscale Bitcoin Trust (GBTC) has also weakened. On January 10, the Securities and Exchange Commission (SEC) finally approved spot Bitcoin ETFs, while allowing the asset manager to convert its trust into an exchange-traded fund.
As of February 9, spot BTC ETFs had attracted about $8 billion. However, the outflow of funds from GBTC amounted to $6 billion. Some analysts believe that once the withdrawal of assets stops altogether, the price of Bitcoin could exceed the $50,000 level in the next few weeks. In addition, the upcoming halving, scheduled for April this year, also contributes to growth.
Bitcoin Miners Holding
The VR Soldier analysts suggest that miners are choosing to hold on to their assets: despite the sharp drop in mining profitability, selling pressure remains subdued. Moreover, the Bitcoin network has seen a decline in transactions from a daily record high of 731 thousand at the end of December 2023 to a three-month low of 278 thousand. The decline is directly related to the decline in interest in BRC-20 tokens and a 76% reduction in the use of taproot addresses. Transaction fees also plummeted, falling 90% from mid-December to early February.
Bitcoin’s upward trend is also fueled by growing interest from whales who are actively accumulating coins. Analytics platform LookOnChain noted significant movements, including the withdrawal of 2,741 BTC worth approximately $118 million from Binance shortly before the price spike. Easing selling pressure and whale action have combined to fuel the move towards $48,000. At the time of writing, the top cryptocurrency is trading at over $47,000.