According to CoinGecko, the price of Bitcoin was up 0.1% to $29,876 at 11:48 a.m. in New York. The recent miner sell-offs and the expiration of derivative contracts around the $29K range towards the end of the month may have contributed to the dip.
“Some miners are selling their bitcoin as the mining profit margin increased recently,” said Youwei Yang, chief economist at BTCM. “Natural market corrections and the expiration of derivatives contracts around the $29K range towards the end of the month may have also contributed to the dip.”
Bitcoin Miners Are Adopting New Strategies
According to a Bitfinix market report, there has been a surge in miners sending large volumes of BTC to exchanges. CryptoQuant data showed that bitcoin miner reserves have dropped by around 5,000 coins since the beginning of June, indicating a transfer to exchanges.
“We believe this activity indicates potential de-risking or hedging strategies adopted by miners, and it is notable that bitcoin mining stocks have soared recently as institutional interest in bitcoin rises,” the report noted.
Youwei Yang, chief economist at BTCM, said that bitcoin’s historic correlations are more reliable during crypto bull cycles than during bear cycles. He added:
“The historical correlation between bitcoin and the U.S. Dollar Index is mixed, similar to its correlation with the SP500, Nasdaq Composite Index, and major financial indices. While some see bitcoin as a safe-haven asset when it moves opposite to the DXY, this is not always true.”
Bitcoin usually has an inverse correlation with the U.S. Dollar Index, but it has not increased in value after the DXY’s recent drop of around 2.3%.
The economist said that many indicators suggest a bull market starting in mid-2024. He mentioned the bitcoin halving, expected to happen in April 2024, could match the SEC’s timeframe to decide on whether to approve multiple spot bitcoin ETFs.
Yang said that a possible Federal Reserve rate cut could happen as soon as January or March, based on the CME FedWatch Tool’s probabilities for rate changes.
“However, given sticky inflation, my guess is that the Fed may not cut rates until May 2024,” he said. “This is when a full-fledged bull cycle is expected to start, encouraging long-term players to hold and accumulate bitcoin from now to then.”
