Bitcoin Reaches A Struggling Zone Near $27K! Will BTC Price Continue To Plunge?

The bearish onslaught on Bitcoin continues unabated, turning the market crimson as large-scale investors liquidate their holdings in the face of falling prices. Additionally, numerous on-chain indicators are signalling a potentially steep decline for BTC as it hovers near an unsafe zone, prompting sellers to amplify the bearish pressure.

Negative Sentiment Emerges Among Bitcoin Miners

As the bearish momentum of Bitcoin shows no signs of easing, miners are compelled to offload their BTC positions to maintain profitability. On-chain data suggests that miner selling may have contributed to the recent dip in the asset’s value below the $28,000 threshold.

An analyst’s CryptoQuant post highlights that miners were applying selling pressure on Bitcoin during its decline. The “miner netflow” metric, which measures the net amount of Bitcoin entering or exiting miner wallets, is important. Positive values indicate accumulation by miners, potentially bullish for the price. Negative values suggest miners are selling, which can have bearish consequences for the asset.

During Bitcoin’s price decline a few days ago, the 30-day SMA miner netflow showed a sharp red spike as the cryptocurrency hovered just above $28,000. Following this spike, the asset quickly dropped to the low $27,000 level. The timing of these large net outflows from miners suggests that their selling may have partially contributed to the coin’s downturn.

The chart displaying the 30-day exponential moving average (EMA) for Bitcoin miner reserves, which gauges the total amount of BTC held by miners at any given time, also reveals this spike. Currently, the rate at which Bitcoin miners are selling (relative to the past year) appears to be greater than the selling rate during the FTX crash in November 2022.

What Lies Ahead For BTC Price?

Bitcoin price has declined over 10% in the last week following bearish on-chain data. Moreover, investor confidence has touched a one-month low recently after the BTC price failed to hold its momentum above $28K. 

Bitcoin continued to decline and failed to break above the $30,000 mark, staying in a bearish zone. The cryptocurrency even dropped below the $28,000 support level and tested the $27,200 support before hitting a low of around $27,157. Currently, BTC is consolidating its losses and attempting a minor recovery wave above the $27,500 level.

As of writing, Bitcoin trades at $27.4K, declining over 0.5% in the last 24 hours. Analyzing the daily price chart, Bitcoin needs to drop below its current 23.6% Fib level and test its support at $27.1K. If bulls manage to hold that level and bring enough buying pressure, then there is a possibility of a bullish reversal. A breakout above $27.5K and the EMA-20 trend line will send the BTC price to a bullish territory, surpassing the level of $28K.