Bitcoin's price fell to a 40-day low of $40,700 on January 19, raising fears of major liquidations if it loses the $40,000 support.
Since the long-awaited immediate ETF approval ruling, Bitcoin (BTC) has delivered sideways price performance. Another wave of selling on January 19 saw prices fall by about $40,000 for the first time since mid-December.
Miners scooped $482 million worth of Bitcoin amid market decline
On January 19, the price of Bitcoin fell below $40,700 for the first time in 40 days, after settling within a range of $42,000 to $43,000 for much of the past week. However, on-chain data trends reveal that bullish miners have swooped in to defend the vital $40,000 support level.
Cryptoquant's miner reserve metric shows how many balances are currently in wallets controlled by recognized mining companies and pools.
The chart below shows that Bitcoin miners increased their reserves by 12,058 BTC on January 19 alone.
As shown above, miners increased their holdings by 12,058 BTC worth approximately $494 million at current prices. The timing of this massive acquisition suggests that miners swooped in to stem the recession just as prices were starting to fall toward $40,000.
Miners are influential stakeholders in any proof-of-work cryptocurrency ecosystem. This significant buying trend among miners may undermine retail investor confidence and avert panic selling.
Bullish futures traders are showing resilience
Moreover, it also appears that bullish traders in Bitcoin derivatives markets continue to be bullish amid the decline in Bitcoin prices. By noon ET trading hours on January 19, Bitcoin's price had fallen by 7% during the daily time frame.
Bitcoin's open interest has held up strong, falling barely 2% as it went from $18.5 billion to $18 billion — and this consensus points to widespread long-covering maneuvers among financial derivatives traders.
Open interest tracks the real-time value of all active derivatives contracts for cryptocurrency assets. When open interest remains flat during price declines, as noted above, this indicates that traders holding long contracts are doubling down on their positions in hopes of a quick recovery in the spot markets.
Instead of closing their positions as bitcoin prices fell, trading data shows that bitcoin miners and bullish derivatives traders swooped in, investing millions to defend their positions.
BTC Price Forecast: Can Bitcoin Stay Above $40K?
As Bitcoin's price fell below $41,000, it raised concerns that a loss of $40,000 could trigger stop-loss orders and margin call orders. From an on-chain perspective, a $482 million takeover by miners and derivatives traders defending their long positions could build enough demand to keep BTC above $40,000.
IntoTheBlock entry and exit data on price data also confirms that BTC has significant support in the $40,000 region.
The chart above shows that 679,910 current addresses have held 313,000 BTC at a maximum price of $40,313. If this buying wall can hold strong, Bitcoin price will likely avoid further declines below $40,000 in the short term.
On the upside, Bitcoin bulls could regain control of the market if the price manages to rise above the $45,000 barrier.
