Bitcoin (BTC) has shown a strong uptrend, reaching above $45,000 for the first time since mid-January. The price increase is largely driven by the reduced selling pressure from Bitcoin miners, who have been holding on to their coins instead of selling them.
According to CryptoQuant, a data analytics platform, the amount of Bitcoin held by miners has dropped to the lowest level since June 2021, indicating that miners are not selling their coins in large quantities. CryptoQuant also reports that the daily sales of Bitcoin by miners have decreased from over 800 BTC in late 2023 to below 300 BTC in early 2024.
This suggests that miners are changing their strategy and keeping their coins, despite the decline in profitability from Bitcoin network fees. CryptoQuant notes that the fees paid to miners have fallen by 90% from the near-record highs in December 2023, due to the lower network activity and the reduced transactions from inscriptions and BRC-20 token mints.
The lower selling pressure from miners has also been accompanied by the increasing demand from large-scale investors, or "whales", who are buying more Bitcoin. CryptoQuant data shows that there have been significant withdrawals of Bitcoin from exchanges, such as Binance, just before the price surge.
The price of Bitcoin has also been influenced by the expectations of the Federal Reserve's monetary policy, which is unlikely to lower interest rates in March, as the market had anticipated. This could boost the appeal of Bitcoin as a hedge against inflation and currency devaluation.
Bitcoin's price has risen by more than 4% in the past 24 hours, and by more than 6% in the past week, according to CoinGecko. At the time of writing, Bitcoin was trading at around $44,800, nearing the $45,000 mark.