Bitcoin Drops Below $35K; Increased Miner Sales Might Limit Price, According to Capriole Investments

Written by Marty Byrde

10/28/23

Bitcoin (BTC) surpassed the $35,000 mark briefly on Wednesday, marking its second occurrence this week. However, the momentum was short-lived as the price faced a swift decline. This drop might be due to large-scale sell orders, possibly from bitcoin miners, indicated by a hedge fund expert. The significance of the $35,000 threshold is that it acts as a monthly resistance point. This might indicate a phase where bitcoin's value remains below this level for a while, especially after its notable surge, mentioned Charles Edwards, the brain behind the Bitcoin-centric hedge fund, Capriole Investments. Edwards commented, "An unusual amount of Bitcoin is being sold by miners today. This could be a precursor to a period of market stabilization." He also pointed out a rise in Capriole's metric, the Bitcoin Miner Sell Pressure, signifying that BTC miners are presently offloading a more substantial portion of their earnings than usual. Further Insights: Despite the current market stabilization, Edwards remains optimistic, speculating that bitcoin might aim for the $40,000-$45,000 bracket in the upcoming weeks once the selling pressure diminishes. "Though the price might face a temporary halt at this monthly resistance, the next significant resistance is anticipated in the low to mid-$40K range," Edwards predicted. Notably, Bitcoin also touched the $35,000 mark earlier this week, reaching a peak not seen in 17 months. This surge in price was driven by the anticipation of a direct bitcoin exchange-traded fund, among other factors. However, despite initial rumors of an imminent approval for this fund being unfounded, bitcoin has only seen a slight dip from its peak. Market Overview: In contrast to Bitcoin's recent performance, traditional markets are showing instability. Following Bitcoin's brief ascent to $35,000, it experienced a minor 2% decline but is still up by 1.6% in the last day. This contrasts with U.S. stocks; the Nasdaq and the S&P 500 have seen decreases of 2.4% and 1.4% respectively. Adding to market concerns are the sharp rise in the 10-year Treasury yield and disappointing Q3 earnings from major companies, coupled with escalating geopolitical tensions.