On-chain shows that bitcoin miners have recently been in the distribution phase, a sign that could prove bearish for the price of the crypto.
Bitcoin Miners See Reserve Downtrend as Miners Look to Dump
As one analyst in a Cryptoquant post pointed out, the latest selloff from BTC miners could push the price down in the near term.
The “miner reserve” is an indicator that measures the total amount of bitcoins currently stored in the wallets of all miners.
When the value of this indicator rises, it means that miners are currently depositing coins in their wallets. Such a trend, in the long run, could be a sign of accumulation from these network validators, and thus could be bullish for the price of BTC.
On the other hand, the decreasing values of the metric show that miners are moving the total number of coins from their reserves at the moment. Since miners usually withdraw their BTC for the purpose of selling, such a trend can be bearish for the value of the crypto.
Now, here is a chart that shows the trend in bitcoin miner reserves over the past several months:
Looks like the value of the metric has been going down in recent days | Source: CryptoQuant
As you can see in the above graph, the bitcoin miner reserves have been on a downward trend over the past few weeks, while the price has been rising.
This may suggest that miners may have participated in the recent distribution, taking advantage of the higher prices.
This sell-off from miners could cap off this latest rally and drive the coin’s value down, at least in the short term.
The reason for such dumping from this group is the recent decrease in revenue in bitcoin mining. Many miners may need to sell more than usual to pay their running costs on these low revenues.
Some other miners will also have the balance paid for their mining rigs, so they will have to sell more of their reserves to pay in the current environment.
btc price
At the time of writing, bitcoin price is floating around $24.5k, up 6% over the past seven days. In the past month, the value of crypto has increased by 21%.
The chart below shows the coin’s price trend over the past five days.
The value of the crypto seems to have been moving sideways since the rise a few days ago | Source: BTCUSD on TradingView
Featured image from Dmitry Demidko on Unsplash.com, charts from TradingView.com, CryptoQuant.com