Indepth Analysis of the 85 Bitcoin Crash Day Miners Dumping Governments Selling Exchanges Compensating Should One Seize the Opportunity to Buy Low

From a trend perspective, the upward pressure on Bitcoin remains significant, primarily due to miner sell-offs, U.S. government sales, and payouts from entities such as Mt. Gox and Genesis, which are expected to take some time to digest.
(Background Summary:
Experts: Bitcoin ETF and futures “arbitrage spread” once disappears, BTC faces the risk of a sharp decline.)
(Background Supplement:
Bitcoin consolidating at $60,000! Will a V-shaped crash occur again? Is Ethereum (ETH) in a more critical situation?)
Article Directory
Bitcoin’s rebound in July, with $70,000 as a significant obstacle
A highly accurate Bitcoin bottom-fishing indicator
How Bitcoin will develop in the future
Summary
On August 5, Bitcoin experienced a significant drop, and many whales faced liquidation, leading to a grim market atmosphere. Many attributed the market crash to expectations of a U.S. economic recession and rising interest rates in Japan, seemingly overlooking the inherent massive sell pressure within the market. Moreover, the market has overly focused on random factors influencing Bitcoin’s market trend, which, from a minimal resistance perspective, has merely amplified the depth of the decline. The author primarily focuses on trend research related to Bitcoin, and previous articles have generally aligned with Bitcoin’s fundamental trajectory. This article aims to provide some trend analysis viewpoints on Bitcoin without the influence of random factors for readers’ reference.
Between significant drops and rises, various reasons lead users to be bullish or bearish, creating the core of the long-short game. Therefore, when discussing trend development, the length of the cycle must be clearly defined. From the overall bull market perspective, it is still challenging to assert that the bullish market cycle has changed; this article continues to lean toward a bullish outlook. From a macro perspective, although recent U.S. employment data has underperformed expectations, more data is needed to confirm a recession in the U.S., making it hasty to fully shift to a bearish outlook at this time. This article discusses trend changes more between weeks and months, which is also a feature of the author’s previous trend research articles. Below, this article attempts to discuss the intrinsic reasons behind this market decline from a trend perspective.
The author previously believed that the reasons for the rebound at the end of July mainly stemmed from two dimensions: 1. Analysis of the German government’s sell-off and Mt. Gox sell-off; 2. The impact of Trump’s speech. Specifically, after the German government sell-off concluded, market panic diminished, but during the Mt. Gox payouts, the market underestimated the sell pressure from retail investors, who tend to chase highs and sell lows, coupled with the stimulus from Trump’s speech, leading to a significant rebound in the crypto market. However, when the market failed to effectively break through $70,000, the bullish momentum had already weakened.
Why does the author believe that Bitcoin can opportunistically enter the market in August after Trump’s speech? There are three key indicators to consider. First, Wall Street institutions have shown insufficient buying momentum after Bitcoin entered the $70,000 range, which is corroborated by their past accumulation history. Currently, institutions are still in a hoarding phase, lacking a strong willingness to drive prices up aggressively. Additionally, Bitcoin miners began selling at $70,000. As early as June 13, CryptoQuant posted on platform X indicating that Bitcoin miners were under pressure and had begun selling; recently, miner pool transfers, OTC trading volumes surged, and the phenomenon of large listed mining companies reducing holdings has become evident. When Bitcoin’s price fluctuated between $69,000 and $71,000, miners intensified their sell-off efforts. Data shows that on June 10, miners sold 1,200 Bitcoins through OTC trading, marking the highest daily trading volume in two months. Furthermore, Bitcoin exhibits seasonal characteristics in August, which also has similar macro circumstances.
These three indicators, to some extent, already hint at the weakness of the bulls. At this point, if negative macro factors emerge, it will be challenging to curb this downward trend. Other negative macro factors include underwhelming U.S. employment data, rising interest rates in Japan, and the U.S. government releasing approximately 28,000 Bitcoins; on top of this, the distribution of 33,960 Bitcoins from the Mt. Gox settlement agreement, along with Genesis creditors distributing $1.5 billion worth of Bitcoin and Ethereum, creates substantial selling pressure that is difficult to alleviate in the short term. Coupled with whale liquidations, this ultimately led to the market’s significant drop.
The author believes that when Bitcoin approached $70,000 at the end of July, it was indeed challenging to make a direct short decision. However, based on the aforementioned trend research, taking some hedge measures to wait for more favorable factors to emerge is not difficult. Nevertheless, when Bitcoin crashes, there is a very accurate bottom-fishing indicator that can support investors’ active entry. This indicator is the miner shutdown price, which has proven to be highly precise through many cycles of bull and bear markets.
According to Poolin data, the current shutdown price of the mainstream Bitcoin mining machine Antminer S19XP is $54,507, while the Antminer T21 is at $48,169. In terms of Bitcoin, the range of $48,000 to $54,000 effectively forms a very important price support zone, especially after Bitcoin fell below $63,000; investors should consider gradually building positions at this level, which can almost be confirmed as a gradual bottom-fishing area without excessive technical and market analysis.



In addition to the above intuitive data, CryptoQuant CEO Ki Young Ju provided a data statistical analysis worth referencing. On August 6, Ki Young Ju posted on X, indicating that the cost basis of Bitcoin is as follows: ETF/custodial wallet: $65,000; Binance traders: $55,000; miners: $45,000. During previous market downturns (May 2022, March 2020, November 2018), prices below these levels confirmed a bear market; old whales: $22,000. As mentioned above, Bitcoin is currently still primarily in a bull market from a broader trend perspective, and from the perspective of mining machine prices, $45,000 is almost the lower limit for Bitcoin’s decline.



In the future, how will Bitcoin’s price develop? From the currently dominant factors, the macro situation in the U.S. remains a significant influence. So how do market leaders view the future development of the U.S. and Bitcoin?
Goldman Sachs CEO Solomon predicts that the Federal Reserve will avoid emergency rate cuts, as he believes the U.S. economy will not fall into recession. Solomon stated: “I do not expect to see any progress before September. The economy will develop steadily and likely will not enter a recession. Based on the current economic data and the information released by the Fed, I believe there may be one or two rate cuts this fall.”
Cryptocurrency analyst Alex Krüger posted on X, stating: “This round of market collapse is clearly driven by macro factors, not specific to the cryptocurrency industry.” A financial crisis driven by a large number of Japanese leveraged speculators is much better than one caused by a recession in the U.S. Regarding U.S. data, the current focus is on the employment market, so special attention should be paid to the initial jobless claims on Thursday (which usually do not affect the market) and the state employment data to be released on August 16 (providing detailed state-level employment data, which is rarely focused on by the market).
On August 6, 10x Research stated in its latest report that many attributed Bitcoin’s sell-off to the unwinding of Japanese yen carry trades, but the reality is much more complex. Since mid-March, Bitcoin has been quite weak, despite the Nasdaq index rising 15% during this period and the yen depreciating 10%; Bitcoin has remained in a range of fluctuations. Arbitrage trading relies on the U.S.’s sustained high interest rates, which are unlikely to last. The rules of the game have changed. In the past 24 hours, cryptocurrency market trading volume reached $244 billion, the highest level since March 6. After reaching an all-time high, Bitcoin experienced significant intraday liquidations that day. As new price-driving factors for assets emerge, financial markets resemble a puzzle that needs regular reassembly, and this is one such occasion. Unlike the significant declines in April and June due to increased leverage, this time such reversals may not occur.
On August 6, QCP Capital, in its latest analysis, stated: Regarding rumors of emergency rate cuts, QCP believes this is unlikely, as it would severely damage the Fed’s credibility, intensifying market panic and leading people to believe a recession is imminent. Furthermore, yesterday’s risk-off wave wiped out a considerable portion of leverage. With prices plummeting, it may be time to consider accumulating BTC and ETH spot. It is certainly too early to conclude whether the market will return to normal. Although the VIX index has retreated from yesterday’s peak of over 65, it remains above 30.
On August 6, Coinbase researcher David Duong stated that Tuesday’s market conditions suggest that with increased purchasing activity from centralized exchanges, a short squeeze may occur, potentially leading to a market rebound in the coming days. Additionally, Genesis is distributing Bitcoin and Ethereum in physical form as part of its bankruptcy liquidation plan; the unwinding of yen carry trades may also influence Mt. Gox creditors’ decisions to receive Bitcoin at present. The recent drop in the market does not signify the beginning of a new long-term trend or market cycle.
From a trend perspective, the upward pressure on Bitcoin remains significant, primarily due to miner sell-offs, U.S. government sales, and payouts from entities such as Mt. Gox and Genesis. This creates substantial upward pressure on Bitcoin, which will take time to digest. However, once Bitcoin enters the $48,000 to $54,000 range, investors can essentially begin to gradually bottom-fish. According to Goldman Sachs analysts’ predictions, the Federal Reserve may implement one or two rate cuts this fall, which will effectively provide positive momentum for Bitcoin. Additionally, with the U.S. elections approaching, Trump’s radical rhetoric will help restore market sentiment and further drive Bitcoin’s rise. However, the author is more optimistic about the market in the first half of next year, primarily because the market has absorbed the ongoing massive sell pressure recently, and the Fed’s rate cuts will provide ample liquidity for the crypto market.



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