Bitcoin Miners Are Probably Selling Their Output at the $28K Level: Matrixport

Bitcoin (BTC) is experiencing selling pressure at the $28,000 price level, and miners may be responsible, crypto-services provider Matrixport said in a report Friday.

Matrixport said it suspects that bitcoin miners are being forced to liquidate any new inventory produced because profit margins have compressed in recent weeks, the report said.

Mining has become very competitive, and often unprofitable, due to the continuous increase in bitcoin miner difficulty, the report added. Mining difficulty – the measure of how easily miners can discover a new block of bitcoin – hit an all-time high earlier this week.

“At the current input cost and potential output revenue expectations, most of the machines produced before 2022 appear to be unprofitable,” wrote Markus Thielen, head of research.

This means miners are forced to sell their inventory at the current level instead of holding on till prices increase as Matrixport foresees, the note said.

“There is now significant upside convexity for miners as profitability could increase fourfold if bitcoin prices increase by 10% plus,” the note added.

Read more: Crypto Market Near-Term Upside Is Likely Capped: Bank of America