BTC’s recent bullish streak hinges on expectations of a spot Bitcoin ETF (exchange-traded fund) approval. But now it faces a potential setback as Bitcoin whales enter a redistribution regime.
On-chain data suggests there is a significant chance the price of Bitcoin will retrace toward $37,000.
Why Bitcoin May Drop to $37,000
Ali Martinez, BeInCrypto’s Global Head of News, noted a 1.10% decline in the number of entities holding at least 1,000 BTC over the past three days. This decline might not signify a sell-off. However, it suggests a redistribution regime among large Bitcoin whales.
The rising selling pressure could soon impact the price of Bitcoin. Martinez believes if prices lose the $43,200 support, such an event could put the recent bull rally on hold. Indeed, he suggested that BTC’s price could drop below $40,000 if this were to happen.
“[If you are] anticipating a Bitcoin price correction… The first indicator would be a sustained close below $43,200. If this happens, BTC could be headed towards $37,000,” Martinez said.
Likewise, analysts at Santiment have advised caution, noting that the current surge in bullish market activity is leading to a widespread fear of missing out (FOMO) among investors. This is a trend that they suggest warrants a careful approach. Nonetheless, Martinez added that as long as Bitcoin continues to hold above the $43,200 support level, “the odds seem to favor the bulls.”
BTC Miners Are Banking From Fees
Given Bitcoin’s impressive 164% year-to-date price increase, investors are not the only ones profiting. Indeed, Bitcoin miners have also seen steady growth this year, with their total earnings eclipsing $10 billion, as pointed out by Jameson Lopp, the co-founder of CasaHODL.
“Bitcoin miners earned over $10 billion in 2023, a significant addition to the $57 billion total over the past 15 years. This number assumes they instantly sell for fiat, which is most certainly not the case – miners are HODLers,” Lopp said.
Read more: Top 7 Platforms To Earn Bitcoin Sign-Up Bonuses in 2024
These high earnings can be attributed to the growth of Ordinal-like transactions on the Bitcoin network, which has helped push the average transaction fee to new highs.
According to analysts at Kaiko Research, Bitcoin is “outperforming all major traditional assets even in risk-adjusted terms.” This year, it has achieved one of the highest Sharpe Ratios among major assets.
Indeed, Bitcoin ranks just behind semiconductor leader Nvidia, whose stock value more than doubled between January and May, driven by the growing excitement around artificial intelligence (AI).
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