Bitcoin: Miner fees decline as bears take this next step

• BTC correction affected miners financially as fees collected fell.
• Institutions strategically accumulated BTC amid market complexities.

Bitcoin [BTC] witnessed a massive correction in the last few days. The price of BTC fell past the $42,000 support level, causing FUD amidst the overall market.

Miners see red

The recent correction in the BTC sent shockwaves not only through the community of holders, but also significantly impacted Bitcoin miners.

Over the past 24 hours, BTC miners have found themselves grappling with financial strain as transaction fees hit their lowest levels since June 2022.

This introduces a new layer of complexity, as miners face the challenge of maintaining profitability amidst diminishing compensation.

The financial pressure on miners has broader implications for the BTC landscape.

The reduced rewards for miners can create selling pressure, as the miners are compelled to navigate between sustaining profitability and managing their holdings.

This miner-driven selling could potentially contribute to downward pressure on Bitcoin’s price, adding more momentum to the ongoing market correction.

Institutional interest remains high

In contrast to the miner challenges, institutional players have been strategically accumulating BTC.

Excluding Grayscale, Bitcoin ETF issuers amassed a considerable 86,320 BTC at an average price of $42,000, reflecting a substantial investment totaling $3.63 billion.

This strategic accumulation by institutions underscores a long-term perspective, suggesting sustained confidence in Bitcoin’s future value.

However, it also introduces more centralization of BTC, with potential short-term impacts on the BTC market.

As of press time, Bitcoin was trading at $41,084.39, reflecting a 1.27% decline in the past 24 hours.

There was a reduction in the total number of addresses holding BTC, hinting at a potential contraction in overall market participation.

Additionally, the decline in the long/short difference indicated that new addresses outnumbered old ones, suggesting a potential shift in market sentiment.

Read Bitcoin’s [BTC] Price Prediction 2024-25

Amidst these developments, a silver lining emerged with a surge in daily active addresses on the Bitcoin network.

This uptick in network activity served as a counterbalancing force, injecting a degree of stability and potentially mitigating the impact of other negative factors.

Source: Santiment