Bitcoin’s journey into the new year continues to show modest upward momentum, and its price recently dropped below the $95,000 price point. Amidst this movement, the market seems to be seeing a significant trend among miners as they face the effects of rising prices and selling pressure.
Insights from XBTManager, CryptoQuant, shed light on the challenges facing Bitcoin miners and the broader implications for the cryptocurrency market.
Miners Feel The Pressure As Bitcoin Stays Below $100K
In a post titled “The Strong Remain, the Weak Exit the Market,” XBTManager highlighted that the appreciation of Bitcoin has put miners in a “critical situation”.
The recent price increase above $100,000 initially brought huge gains for miners, but subsequent corrections have intensified selling activity.
According to the analysis, miners have entered a situation where their positions are “very underpaid,” leading to severe financial stress. XBTManager wrote:
Following a sharp reversal in the price of Bitcoin, it entered a correction phase and rose to 102k levels, and started another wave of heavy selling. As Bitcoin rose to 102k, miners’ positions, which were in “well-paid” status, shifted to “very low-paid” status as selling pressure intensified at that level.
Notably, as weaker miners exit the market, stronger ones are expected to continue, which could open up opportunities for investors. XBTManager’s opinion suggests that if we assume that the current bull market remains intact, the continued challenges of miners could bring favorable conditions for strategic buying.
MVRV Index Indicators For Bitcoin’s Continued Growth Opportunities
Another CryptoQuant contributor, CryptoOnchain, provided additional insight into the Bitcoin market cycle. Analyzing the 100-day MVRV (Market Value to Virtual Value), CryptoOnchain argued that Bitcoin is “yet to reach its peak” in this cycle.
Historical data shows that the average MVRV has reached a value of 3 at the peak of the market in the last two cycles. Currently, this ratio stands at 2.14, which indicates the potential for further increases.
MVRV 100-day moving average: Bitcoin has not yet reached the high of this cycle
“The MVRV metric has reached 3 market highs in the past two cycles, and currently stands at 2.14… pic.twitter.com/YlNLQwgE3w
– CryptoQuant.com (@cryptoquant_com) January 9, 2025
The MVRV metric, which helps identify market peaks and troughs, indicates that Bitcoin may be preparing for another price increase in the coming months.
If the pattern of previous cycles holds, Bitcoin could be on the way to a new peak before the end of the current cycle. CryptoOnchain in particular concluded by commenting:
Based on this, it can be said that Bitcoin is preparing to go ahead with the high price of this cycle, which is likely to happen in the coming months.
The featured image was created with DALL-E, a Chart from Tradingview