KEY POINTS

  • Bitcoin miners are currently increasing their selling pressure
  • Whale activity has focused on key levels under $19,000
  • Bitcoin is affected by the decline in stock market

Bitcoin is moving away from $19,500, albeit in a direction that traders and investors do not like. A set of factors – mining pressure, whale activity and decline in the stock market – are triggering this decline and a possible drop to $16,000.

New data from CryptoQuant showed that miners who were previously inactive started selling Bitcoin again. Increased selling from the miners will increase the supply of Bitcoin in the market. With more supply and increased demand, the price will have to equilibrate at a lower level. CryptoQuant analysts said continued selling will raise the probability of Bitcoin consolidating at the current level. Alternatively, a price drop could happen.

The analysts said the Miner's Position Index (MPI) is now at 1.5. It was previously in the negative for most of the year. A high MPI could mean the end of the bull market. Still, 1.5 is not that high and might only indicate a consolidation in the short term, Cointelegraph reported.

Traders and investors are observing "whale activity" or the behavior of those who trade or own large amounts of Bitcoin. Cointelegraph said whales are currently waiting to accumulate Bitcoin at the following levels: $17,170, $17,651, $18,979.

Still, traders will need to be careful with the data, particularly in the order books of cryptocurrency exchanges. Aanalyst and trader "Byzantine General" said there was a buy order of 857 BTC at $18,750 on Bitfinex. Naturally, many have put their orders within that price range. However, the buy order disappeared when the price neared $18,750, implying it was a spoof order to lure others into putting their own orders within that price.

Due to Bitcoin's correlation with the stock market, traders think the decline in the Dow and S&P 500 have also triggered a decline in the price of BTC. JPMorgan recently warned the market could face a pullback by early next year should investors make certain trades "crowded." The crowded trades include shorting the U.S. dollar and going long on copper and Bitcoin.

"Any equity correction in the near term would represent a buying opportunity. We are only in the middle of the current bull market," JPMorgan said.

Gold-colored Bitcoin coin on ground Gold-colored Bitcoin coin on ground Photo: André François McKenzie on Unsplash