Bitcoin
Bitcoin: As miners sell big, here’s what it means for BTC prices
With Bitcoin trading under $26,000, miners on the network have begun to empty their wallets. With market sentiments already dampened by the SEC’s latest decision, this might put further downward pressure on the coin’s price.
- The uptrend in BTC’s Miner to Exchange Flow suggested that miners have increasingly sold their holdings in the past few days.
- However, despite recent price troubles, BTC’s exchange withdrawals have rallied.
Bitcoin’s [BTC] price fell to a two-month low on 31 August after the Securities and Exchange announced that it would be extending the deadline for reviewing all spot Bitcoin exchange-traded fund (ETF) applications.
Read Bitcoin’s [BTC] Price Prediction 2023-2024
The SEC’s decision was seen as a blow to hopes of a Bitcoin ETF being approved in the near future, and it weighed on sentiment in the cryptocurrency market. BTC fell as low as $25,470, its lowest level since 16 June.
As prices dwindled, miners began to “offload” their coin holdings, data tracked by CryptoQuant revealed. An assessment of BTC’s Miner to Exchange Flow on a 14-day small moving average (SMA) revealed a 35% uptick in this metric since 31 August.
Source: CryptoQuant
The Miner to Exchange Flow metric measures the amount of BTC that is flowing from miners to exchanges. When this metric rally, miners are selling more BTC than they are mining. This can be a sign that miners are bearish on the price of BTC and are looking to sell their holdings.
According to pseudonymous CryptoQuant analyst Greatest_Trader, in the past few months, BTC’s upward and downward price movements have significantly correlated with instances when miners on the network sent their coins to spot exchanges.
“A notable development recently unfolded as the metric experienced a substantial surge simultaneous with Bitcoin’s price touching the $30K mark. Curiously, this surge in miner activity contributed to a significant price retracement, nudging Bitcoin’s valuation downward to the $25K threshold. Subsequently, the metric saw a marked dip, hitting a yearly low,” the analyst found.
Apart from the Miner to Exchange Flow metric, other on-chain metrics used to track BTC mining activity, such as Miner Reserve, confirmed coin exits from miners’ wallets. According to CryptoQuant, BTC’s Miner Reserve has plummeted since 29 August.
This metric measures the number of coins held in affiliated miners’ wallets. Its value indicates the reserve that miners have yet to sell. At press time, this stood at 1.83 million BTC. Since 29 August, miners have sold 14,000 BTC.
Source: CryptoQuant
Some are not as interested in selling
According to a crypto analyst Ali_Charts, “for the first time ever, $BTC exchange withdrawals surpass deposits for three consecutive months.”
Source: X (Ali_Charts)
How much are 1,10,100 BTCs worth today?
When an asset’s exchange reserve (deposits) declines, fewer sell-offs take place. It often acts as a precursor to a price rebound in most instances.
According to Ali, the surge in exchange withdrawal might be because investors increasingly opt to retain their holdings in personal wallets, reflecting diminished trust in crypto exchanges and a desire to avoid potential regulatory issues in light of recent changes in the US.
