Following the Bitcoin (BTC) halving on May 12, traders generally expect the toll of the top-ranking cryptocurrency by market capitalization to drib. According to a prominent on-chain analyst, the selling pressure may come from crypto exchanges.

Willy Woo, the co-founder of Hypersheet, said that exchanges will probable begin selling their storage of crypto assets composed of trading fees. Typically, exchanges receive trading fees in the course of cryptocurrencies and sell them to cover operational costs.

Considering that the crypto exchange marketplace generates 1,200 BTC a day from fees — equivalent to $eleven.6 1000000 — it may ho-hum down the uptrend of Bitcoin.

Selling force per unit area that comes from crypto exchanges may spoil Bitcoin recovery

Subsequent to the Bitcoin halving, miners will generate half of the BTC they used to in the past iv years.

Historical revenue of Bitcoin miners. Source: Blockchain

Historical revenue of Bitcoin miners. Source: Blockchain

On a daily basis, the revenues of miners will reject from 1,800 BTC to 900 BTC, based on rough estimates released past Woo.

When the revenues of miners go cut by one-half, the mining sector volition earn near 33% less BTC than the cryptocurrency exchange market. Every bit such, the risk of a major sell-off post-halving comes from exchanges more miners.

Woo explained:

Mail service this 2022 halvening miners will cease to be the biggest sellers of Bitcoin. It'll be the dawn of the crypto commutation equally the leading seller. The biggest sell pressure on Bitcoin will presently be from exchanges selling their BTC fees collected into fiat.

Bitcoin exchange volume continues to increase while mining revenue falls. Source: Skew

Bitcoin substitution volume continues to increase while mining revenue falls. Source: Skew

He emphasized that the term "selling pressure" is often misused in the cryptocurrency marketplace. When individual traders sell or buy Bitcoin in the exchange market, the orders are matched with one another. Information technology is difficult to categorize such trades as sell or buy book.

Instead, he noted that there are ii main sources of selling that affect the market: miners and exchanges.

The analyst said:

There'south but two unmatched sell pressures on the market. (1) Miners who dilute the supply and sell onto the market place, this is the hidden taxation via monetary inflation. And (2) the exchanges who taxation the traders and sell onto the marketplace.

Merely, some argue that the market is likely to exist pricing in the pressure of exchange fee-to-cash conversion.

Prominent trader says it won't introduce new sell pressure on the market

Well-known Bitcoin investor "I am Nomad" stated that every major cryptocurrency exchange already sells a big percentage of their fees to greenbacks through the market or with a long-term strategy.

The market may already be pricing in the conversion of fees to cash, reducing the likelihood of information technology causing a strain on the market.

The investor said:

Every major commutation sells a large percentage of fees to greenbacks already (via their own marketplace or long term tranche). I know this considering I've been on the buy side of said deal. This is not introducing new sell pressure level people should be scared of. It's the same as it'south always been.

If cryptocurrency exchanges continuously catechumen their fees to cash on a regular footing, information technology is not likely to impose heavy pressure on the Bitcoin price trend afterwards the halving.