10 March 2023 13:30, UTC
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Since the beginning of the week, the price of Bitcoin (BTC) has been free falling from $23k. In the last 24 hours, it has gone below the $19k price point. A leading data analytics firm, CryptoQuant, released a statement early today noting that Bitcoin miners caused the bleeding trend in the market.
According to the firm’s analysis, BTC miners have been reducing their reserves since January 21, 2023, putting extra pressure on Bitcoin and contributing to a local downward correction in the price.
CryptoQuant suggested that if the miner pressure continues to increase along with other factors, Bitcoin could hit $16,600. “There is a volume gap between these levels, and accordingly, it can be difficult for Bitcoin to find a local bottom in intermediate zones,” the statement read.
Miners are putting pressure on Bitcoin
“If miner pressure continues to increase in addition to other factors, #Bitcoin could fall to either $19,500 or $16,600.”
— CryptoQuant.com (@cryptoquant_com) March 10, 2023
Although the analytic firm did not explicitly state why crypto miners mounted pressure on the most prominent cryptocurrency on the market, recent reports suggest that miners may be responding to the new tax proposition by the US government.
In a supplementary budget explainer paper from the US Department of the Treasury on March 9, mining companies would pay an excise tax equal to 30% of the electricity cost in digital asset mining, regardless of whether the resources were owned or rented.
One of the few surprises in the Biden budget. A proposed excise tax on electricity usage from crypto mining. Phasing in at 10% in year one and climbing to 30%. pic.twitter.com/UPgUdr8CeG
— John Buhl (@jbuhl35) March 9, 2023
Notably, the tax would go into effect after December 31 and be phased in at a rate of 10% each year until reaching its maximum of 30%.
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