Bitcoin Is Struggling to Push Higher. Selling Is Coming From a Surprising Place.


and other cryptocurrencies edged higher on Wednesday but remained stuck near levels that have held for weeks since the frenzy faded over spot Bitcoin ETFs. The pressure on cryptos may be coming from a surprising place.

The price of Bitcoin rose less than 1% over the past 24 hours to $43,100, a zone around which the largest digital asset has traded for much of the past two weeks. Bitcoin has failed to reclaim its mid-January peak above $48,000—the highest levels since early 2022—which came amid the anticipation and approval of the first spot Bitcoin exchange-traded funds in the U.S.

With Bitcoin struggling to make gains—even as other risk-sensitive assets surge, with the

Dow Jones Industrial Average


S&P 500

pushing to all-time highs—analysts have searched for where sell pressure on tokens could be coming from. The answer may be Bitcoin miners.

Miners stand at the heart of a process called “proof of work” that underpins Bitcoin and keeps the crypto functioning. These miners use computers—often warehouses chock-full of them—to solve complex puzzles in a process that facilitates securing the Bitcoin blockchain and processing transactions. This process requires vast amounts of energy and rewards miners with Bitcoin tokens.

The Bitcoin Miner Reserve, a metric representing the amount of Bitcoin held in miners’ crypto wallets, has recently fallen to the lowest level since June 2021, analysts at crypto exchange Bitfinex wrote in a note this week. There was a notable spike of token flows to crypto exchanges—a precursor to selling—from miners’ wallets on the second day of trading for the newly-approved spot Bitcoin ETFs, the analysts noted. A day earlier this month marked the highest daily negative outflow in the history of the Bitcoin Miner Reserve metric.

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“This net outflow is influenced by various factors, including the need for operational liquidity, response to market conditions, and strategic adjustments post-ETF approval, capitalizing on the price surge that was borne of pre-ETF speculation,” the Bitfinex analysts said.

It all has to do with an event that could ultimately boost Bitcoin prices, but challenge the miners’ business models. Bitcoin is almost due for another so-called halving, which represents a change to the token’s programmatic monetary policy. The next halving is likely to come in April and will reduce the issuance of the token, straining supply in a trend that could boost Bitcoin prices but also make crypto mining a less profitable operation, cutting revenue by some 50%.

“This reduction in reserves suggests that miners are either selling off their Bitcoin holdings or leveraging them to raise capital,” the Bitfinex analysts said. “Miners seem to be selling their holdings of Bitcoin to finance the purchase of more efficient mining rigs.”

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It could be a trend that continues to heap sell pressure onto Bitcoin.

Beyond Bitcoin,


—the second-largest crypto—rose 1.5% to $2,370. Smaller tokens or altcoins were more mixed, with


down 3% but


up 1%. Memecoins exhibited more of the same, with


gaining 1% and

Shiba Inu

shedding 1%.

Write to Jack Denton at