The situation on the Bitcoin chart continues to turn around the intermediate mirror level at 34,708.27 within a wide sideways range of 31,082.82 - 41,980.24, in which we discussed the low-risk trading strategy for BTC/USD.
Now, it seems that a second false breakdown of the resistance at 34,708.27 is being formed cautiously, which may create preconditions for the return of the main cryptocurrency quotes to the level of 31,082.82.
Can this situation be regarded as a signal to sell? Very risky. I do not exclude that the decline may stop near the minimum values of Friday and the level of 34,708.27 will continue to be traded on the chart.
What is the reason for the low volatility and consolidation of Bitcoin? First, there is a lack of strong drivers. Secondly, I think the Great Migration of Miners cannot but affect.
Glassnode's data showed that the largest drop in the hash power of Bitcoin mining took place last week - from 38% to 49% in general. At the moment, 50% of cryptocurrency miners have disconnected or migrated from China. However, this does not force these miners to spend their accumulated bitcoins, as one might expect.
According to Glassnode analysts, a drop in hash power in the absence of a significant increase in miners' expenses may be due to their successful movement. They probably successfully moved to new destinations, liquidated their equipment, or reimbursed costs. This could reduce the desire to sell bitcoins accumulated during mining.
Under normal circumstances, migration from China should be accompanied by an increase in bitcoin spending. This is necessary to cover the increased costs associated with logistics, for example, to relocate machines or dispose of them. However, according to Glassnode's analysis, this is not the case in the recent shift. Instead of spending accumulated income, miners sharply reduced their BTC sales even during the Great Migration.
According to the data of the analytical company, since mid-May of this year, the trend of cutting miners' expenses seems to have not only stabilized or stopped, but completely changed. In other words, miners have been spending less than they accumulate since mid-May, challenging familiar historical behavior. They began to accumulate Bitcoins, and the market had never seen such a thing before.
Glassnode analysts stressed that the long-term increase in savings could be due to the growing conviction of miners in the prospects for Bitcoin. Or it could be the result of having better financing options that allow them to hedge risks.
Thus, in the current lull, there is no reason for panic yet. But a certain degree of uncertainty is growing and will persist until BTC/USD reaches one of the sideways boundaries 31,082.82 - 41,980.24.
