Bitcoin's journey in the new year continues to show less upward momentum, with its price falling below the recent $95,000 price mark. Amidst this trend, the market seems to be seeing a particular movement among miners as they grapple with the effects of rising prices and pressure selling.
Visions from XBTManager, a CryptoQuant partner, light on the challenges facing Bitcoin miners and the wider implications for the digital currency market.
Miners feel the pressure as Bitcoin remains below $100K
In a post titled “The Strong Remain, the Weak Market Revolution,” XBTManager pointed out that Bitcoin's appreciation has put miners in a “vulnerable” position.
The recent price increase above $100,000 initially brought significant gains to miners, but subsequent corrections have strengthened selling activity.
According to the study, miners have entered a state where their positions are “significantly underpaid,” leading to significant financial pressure. XBTManager wrote:
After a sharp pullback in Bitcoin price, it entered a correction phase and rose again to 102k levels, only to trigger another wave of heavy selling. As Bitcoin climbed to 102k, miners' positions, which were in a “fairly paid” state, shifted to a “highly paid” state as selling pressure had increased at that level.
In particular, as weaker miners leave the market, it is expected that those with more resilience will continue, which could open up opportunities for investors. XBTManager's outlook suggests that, assuming the current bull market remains intact, the ongoing challenges for miners could to present favorable conditions for strategic purchases.
The MVRV indicator shows that Bitcoin has the potential for continued growth
Another CryptoQuant partner, CryptoOnchain, offered additional insight into the Bitcoin market cycle. Analyzing the 100-day MVRV (Market Value to Real Value) ratio, CryptoOnchain argued that Bitcoin “has not yet reached its peak” for this cycle.
Historical data shows that the MVRV ratio reached a value of 3 during the top of the market in the last two cycles. At present, this ratio is 2.14, indicating potential for move further up.
100-day moving average of MVRV: Bitcoin has not yet reached the peak price of this cycle
“MVRV metric reached a market-high value of 3 in the last two rounds, but is currently at 2.14… pic.twitter.com/YlNLQwgE3w
— CryptoQuant.com (@cryptoquant_com) January 9, 2025
The MVRV metric, which helps identify market tops and coinindicating that Bitcoin may be preparing for another price increase in the coming months.
If the pattern from previous cycles holds true, Bitcoin could be on track to approach a new peak before the current cycle ends. CryptoOnchain notably concluded by noting:
Based on this, it can be said that Bitcoin is preparing to move towards the high price of this cycle, which is likely to happen in the coming months.
Featured image created by DALL-E, Chart from Tradingview
