Bitcoin Bullish Reversal? Retail Investors Surge as New Addresses Hit 4-Month High
Bitcoin Consolidation: Retail Investors Surge as Miners Face Pressure
Recently, Bitcoin (BTC) has entered a consolidation phase, fluctuating between $61,000 and $62,000 after a brief dip to $58,000 on June 24. With renewed interest from retail investors alongside institutional counterparts, the market exhibits a mix of bullish signs and potential challenges.
Retail Investors Return to Bitcoin
Crypto analyst Ali Martinez has highlighted a resurgence in retail investors, evidenced by a four-month high in new BTC addresses, which reached 432,026. This surge adds to the sentiment that investors are anticipating a significant price increase for BTC in the coming months, despite recent volatility. Martinez noted that Bitcoin is currently confined within a parallel channel, with a potential rebound to $63,200 or $63,800 if the lower bound at $62,500 holds. He also pointed out critical resistance areas at $65,795 and $78,700 as key targets if BTC breaks above them.
Miners Selling Pressure
However, the Bitcoin market faces headwinds. In the past 72 hours, BTC miners have sold over 2,300 BTC, worth approximately $145 million. This selling pressure adds to the ongoing sell-off of confiscated BTC by the US and German governments.
Mining Industry Challenges
The mining industry is under pressure due to lower network fees and reduced block rewards following the Halving event in April. According to Kaiko Research, average network fees have dropped from $3 to $5, significantly lower than the $45 average in January. The halving reduced block rewards from 6.25 BTC to 3.125 BTC, impacting miner revenue.
This revenue squeeze has made it harder for miners to maintain profitability while fixed expenses such as energy, wages, and rent remain constant. The decline in network fees has further exacerbated the reduction in revenue.
Historically, Bitcoin price rallies following Halving events have helped miners offset the drop in rewards. However, the price of Bitcoin has remained relatively unchanged since the April 19 software update.
In April, fees briefly surged to nearly $150 due to increased minting of non-fungible tokens (NFTs) on the BTC blockchain. Although this temporarily relieved miners, fees have since returned to average levels.
Marathon Digital, one of the largest Bitcoin miners, sold 390 BTC in May and plans to sell more tokens to manage its finances. Kaiko Research warns that the risk of forced selling by miners may persist in the coming months. This could lead to industry consolidation as miners seek to “consolidate assets” and “increase efficiency.”
Notable examples include Riot Blockchain’s “hostile takeover attempt” of Bitfarms Ltd. and CleanSpark Inc.’s recent agreement to acquire Griid Infrastructure Inc. for $155 million in an all-stock transaction.
At the time of writing, BTC is still consolidating within its range at $61,880, down 2% in the past 24 hours, erasing all gains from the past 30 days, with losses amounting to 9%.
