Bitcoin often experiences a dip in value during August, known as seasonal weakness. This trend has puzzled traders for years. Recent analysis of on-chain data sheds light on the underlying cause: miner pressure. 💰 🔌 📉 🧐
Miners, who secure the Bitcoin network and earn revenue in Bitcoin, face higher electricity costs during summer months, pushing them to sell off portions of their BTC reserves in August to cover these expenses.
CryptoQuant’s Miner-to-Exchange Flow data reveals a significant increase in transfers of Bitcoin to exchanges during this month. This trend aligns with local market peaks or mid-cycle corrections, leading to increased selling pressure and reduced liquidity. 📈📉 🔄
Traders need to understand this seasonal imbalance: more Bitcoin supply floods exchanges while demand temporarily fades. For short-term traders, anticipating these dips provides an opportunity to hedge or adjust their positions before further price drops. However, for long-term investors, this pressure may create a favorable entry point for future gains.
As for September, it’s often considered a historically bearish month. 📉
A look at past data shows that Bitcoin often experiences both its highs and lows within the first week of the month. This consistent pattern has led to negative returns in 8 out of the last 12 years.
Yet, some analysts see early September corrections as potential buying opportunities before a seasonal rally.
For long-term investors, however, this bearish period may present an opportunity for accumulation.