Bitcoin’s price soared by over two grand yesterday but was pushed back down today amid system issues coming from the largest US crypto exchange, Coinbase.

At the same time, several altcoins have taken the main stage with impressive gains, but none more notable than Pepe.

BTC’s Pump and Dump

It was just over a week ago – last Monday – when bitcoin jumped to a multi-week peak of $65,500 but the bears quickly intercepted the move and drove it south. The correction culminated on Friday with a price drop that pushed BTC all the way down to $60,200.

As most were preparing for another leg down that can see the cryptocurrency losing the coveted $60,000 level, the asset actually reversed its trajectory and reclaimed some value during the weekend to around $61,000.

This Monday began on a more positive note as BTC jumped from $60,800 to $63,500 in just a few hours. However, it failed to maintain its run and retraced to just under $63,000.

The landscape worsened earlier this morning when Coinbase reported some issues with its network. Bitcoin reacted with an immediate price drop that drove it to $61,400.

Despite recovering some ground since then, BTC is still below $62,000. Its market cap has declined to $1.220 trillion, while its dominance over the alts stands tall at 51.1%.

PEPE Leads the Way

Meme coins have become the main talking point once again in the cryptocurrency industry, with numerous impressive price pumps over the past day. PEPE is the leader of the larger-cap meme tokens, having gained over 20% in the past day. Moreover, the asset charted a new all-time high earlier today.

Floki (10%), Dogecoin (4%), and WIF (3%) follow suit from this cohort of crypto assets. In contrast, most other alts are in the red, with ETF solidifying its place below $3,000 after a 2% drop and BNB down beneath $590.

The total crypto market cap has slumped beneath $2.4 trillion after losing $40 billion in a day.

A Bitcoin selloff may be looming as miners are facing increasing pressure due to a sharp decline in revenue following the April 20 halving which slashed block rewards from 6.25 BTC to 3.125 BTC.

On May 13, crypto research firm Kaiko revealed that the recent halving cut the daily production from 900 to 450 BTC, resulting in around $10 billion in revenue loss per year based on the prices at the time.

Miner Selloff Imminent?

Miners were initially able to keep revenue streams buoyed by high transaction fees from the meme coin frenzy and Bitcoin Runes launch however, activity has dwindled on both fronts since.

Two of the largest public Bitcoin mining companies, Marathon and Riot, hold 17,631 BTC worth just over $1.1 billion and 8,872 BTC worth over $500 million, respectively, according to Kaiko.

Transaction fees accounted for 16% of BTC earned by Marathon Digital in April, up from 4.5% in March, it noted before adding “the recent decline in fees could lead to selling pressure from miners.”

“If miners were forced to sell even a fraction of their holdings over the coming month this would have a negative impact on markets.”

“Trading activity typically slows down, and liquidity dries up over the summer months,” it added.

Could $BTC miners become forced sellers as fees fall?

Higher transaction fees offset lower miner rewards for firms in April, but this has since reversed.

Check out our latest debrief for the full trend:https://t.co/mvlZi2k0sv

— Kaiko (@KaikoData) May 13, 2024

The report reads that Bitcoin miners sold most of their reserves amid the crypto meltdown in 2022.

However, they have been holding more over the last two years with a sharp rebound in asset prices which have gained 350% from a cycle low of $16,500 in December 2022 to peak at more than $73,500 in March.

Major miners such as Marathon have missed revenue expectations as a result of this and other factors.

Hash Price Woes

Profitability, or hash price, has slumped in recent weeks and is currently $0.050 terra hashes per second per day, according to HashRateIndex. This is down 72% from the $0.182 TH/s/day it reached around the time of the halving.

The average network hash rate also hit a peak of around 650 EH/s in late April, further compounding miner woes as competition for the next block reward intensifies.

This has been measured in network difficulty, which is also near peak levels of 83.15 T, though it did fall from its record high of 88 T on May 9.

While the crypto market is far from its March peak, analysts say the fundamentals of the Bitcoin network remain strong.

According to the latest Bitfinex Alpha report, Bitcoin’s foundational strength is underscored by key factors like the steadfastness of long-term holders and the plunge in mining difficulty. These factors indicate that the network is positioned for future value appreciation.

Bitcoin’s Fundamentals Are Strong

On-chain data indicates that long-term holders are not selling their bitcoins (BTC) but have been holding onto them for the past two weeks. Analysts said this cohort of investors’ recent activity reflects their strategic positioning for potential entry points at market lows.

Conversely, short-term holders are still taking profit and increasing selling pressure. Analysts revealed this may be a sign of panic and a shift of liquidity toward altcoins, potentially reversing price rallies if not supported by long-term investor purchases. If these market dynamics persist, it would be safe to assume that the short-term bottom is in and bitcoin’s current multi-month range could head to the upside.

These developments come as mining difficulty declined by 6%, its largest decrease since December 2022. The difficulty measures how many hashes must be generated to validate a Bitcoin block and automatically adjusts every two weeks or 2,016 blocks.

The reduction in mining difficulty indicates that the number of Bitcoin miners has declined, and it is less challenging to validate new blocks.

“This reduction in competition is advantageous for the miners who remain, as a six percent decrease in difficulty translates to approximately a six percent increase in Bitcoin earnings for the same level of computational effort,” Bitfinex analysts said.

Crypto Market in Turmoil

Moreover, Bitcoin recently processed its one billionth transaction, underscoring significant activity on the network. On May 6, when Bitcoin achieved the milestone, over 625,000 transactions were executed on the network, indicating the blockchain’s health and adoption as a digital asset.

The recent surge in Bitcoin activity over the past year can be attributed to the launch of new protocols like Ordinals and Runes and the spot BTC exchange-traded funds market, which has boosted the network’s usage.

Despite Bitcoin’s growth and development, BTC currently struggles to remain stable above the $63,000 level due to negative economic indicators from the United States. At the time of writing, the asset was down roughly 2% in the past 24 hours and was trading below $61,600.