Bitcoin Miner Mayhem, On-Chain Fees Drop 90% In Two Months

Bitcoin has been struck by the bears for its third consecutive week. At the time of writing, BTC has lost two critical support zones at $35,000 and $32,000. The first cryptocurrency by market cap trades at $31,987 with a 10.5% correction in the daily chart.

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BTC receives Bear attack in the 24-hour chart. Source: BTCUSD Tradingview

The general sentiment in the market seems bearish, as BTC failed to gain a strong foothold on the high area around current levels. A report by Arcane Research concluded the recent correction follows a week with low exchange activity, a dropped in on-chain activity, and “futures premiums have almost gone”.

The research estimates that on-chain activity has descended by around 69% since the beginning of May and the end of April. As consequence, BTC network fees also declined by almost 93%, as seen in the chart below.

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Source: Arcane Research

The average daily transaction on Bitcoin’s network has gone from $62 in April to $4.38 at the beginning of June. At the same time, the 7-day average mempool transaction has reached its lowest levels since April 2020, as Arcane Research determined.

This has coincided with the mining sector increasing their BTC sales. After China placed new limitations on the sector for certain BTC mining activities at a grand scale, some miners were forced to relocate their operations. Therefore, seems logical that they sold part of their holding to obtain liquidity for expenses.

Lex Moskovski, CIO at Moskovski Capital, said that around 8,545 BTC left miners’ wallets in the last 4 days. The increase in selling pressure has contributed to the recent crash.

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Source: Glassnode via Lex Moskovski

Bitcoin Long Term Holders Seize Buying Opportunity

Where some see fear, mayhem, and disarray, others see a chance to accumulate. Data from Glassnode suggest that the total Bitcoin supply held by long-term holders has been on a rise after reaching a plateau during March 2021.

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Source: Glassnode via William Clemente

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