• When BTC dropped from its record-high on Tuesday, it appears that miners have sold old bitcoins sourced from block rewards.
  • The market’s low liquidity could have had a large impact on the price of bitcoin.

Bitcoin’s rapid ascent in the past month, culminating in a new high, and quick reverse, on Tuesday, have led to some early miners selling their old blocks rewards, putting stress on bitcoin’s value.

CryptoQuant has spotted on-chain data that shows, just before Bitcoin peaked around $69,000, and then plummeted to $62,000, 1,000 bitcoins worth approximately $69 million have been moved to Coinbase from addresses that are more than 10 years old, and which the research firm believes to be linked to miners. Shifting tokens that have been dormant for a long time to Coinbase can be the prelude to a sale.

(CryptoQuant)

Bradley Park, an Analyst at CryptoQuant told CoinDesk that a sale of 1,000 bitcoins would be likely to cause a price drop, given the fact that an exchange order book shows a liquidity of 5-10 bitcoins for every $100 change in price. “Especially when traders wait to enter a long against bitcoin’s record high, like on Tuesday.”

(CryptoQuant)(CryptoQuant)

Park stated that the recent influx in bitcoin into exchanges reminded him of the sharp rise in BTC inflows before the 40% drop in price on March 12, 2020 as Covid-19 began rapidly escalating in severity. This caused governments around the globe to begin lockdowns forcing traders to flee to safety .

When the sell-off ended, Bitcoin had reached its lowest point of $3,850.

Park added, “That time it was also miners.”

Nick Baker is the editor.