Bitcoin: As BTC miners sell big, should you be worried
- Miner to exchange flows surged dramatically in recent days.
- Increased revenue prompted miners to liquidate their stashes.
Bitcoin [BTC] miners sent a large proportion of their stashes to crypto exchanges recently, triggering anxieties among market participants.
According to AMBCrypto’s analysis of CryptoQuant data, the 7-day moving average of miner to exchange flows jumped to its highest value in five months on the 1st of January.
Are miners locking in gains?
Miners, as we all know, frequently liquidate their holdings to cover costs incurred in setting up mining infrastructure. However, such events end up exerting significant downward pressure on the price of Bitcoin. This is because miners are one of the largest holders of the asset.
A CryptoQuant analyst drew attention to previous such instances. A sharp increase in miners’ deposit to exchanges in May 2023 triggered a significant price drop.
In fact, a similar drop in the value of BTC was witnessed after the recent transfer of coins from miners to exchanges.
The steep rise in fee revenue boosted miners’ earnings to levels not seen since the peak bull market of 2021. After a prolonged and punishing bear market, miners couldn’t have hoped for anything better.
Such profits, therefore, justified miners liquidating their holdings.
Read BTC’s Price Prediction 2023-24
Miners see high returns on hashing power
Bitcoin started 2024 on a strong note, bouncing above $45,000 with conviction, AMBCrypto detected using CoinMarketCap’s data. The king coin was exchanging hands at $45,311 at press time.
Apart from transaction fees, the market value of Bitcoin also impacts miners’ profitability. The hashprice soared to $102 per PetaHashes per day (PH/Day) on the 1st of January, indicating significant spike in earnings relative to hashing power committed.