How Bitcoin miners are countering BTC’s price decline

• Miner capitulation has yet to occur despite BTC’s recent poor price performance.
• However, they have continued to take profit. 

In a recent report, pseudonymous CryptoQuant analyst Yonsei Dent noted that despite Bitcoin’s [BTC] price decline post-Exchange Traded Fund (ETF) approval, miner capitulation has yet to set in.

Dent considered BTC’s Hash Ribbon metric – which identifies market trends and miner behavior by tracking the Hash moving averages of the hashrate (30DMA and 60DMA) – and found that the indicator has not signaled a death cross even with the coin’s poor performance since ETFs became tradeable. 

A death cross occurs when the Hash Ribbon’s shorter-term moving average (30DMA) falls below its longer-term moving average (60DMA). This suggests a decline in miner activity and indicates that miners might be seeing low profitability. 

Further, Dent assessed BTC’s Miner’s Position Index (MPI) and found that in the current market, miner capitulation does not seem to be occurring at levels seen during previous bear market lows. BTC’s MPI measures the historical pattern of the selling behavior of miners during market downturns.

According to Dent:

“If we examine miner capitulation selling at an MPI index level of 4.0 during previous bear market lows and bottoms, it becomes clear that this adjustment does not signify the emergence of miner capitulation.”

No capitulation yet, but miners have sold some coins

As pointed out by Dent, “miners (have) sold significant quantities of BTC in January 2024.” The analyst noted that this might be a “proactive move in preparation for future halving events.”

According to data from CryptoQuant, BTC Miner Reserve measured on a 30DMA has declined by 1% year-to-date. This metric measures the amount of coins held in affiliated miners’ wallets. Its decline often suggests a rally in coin sell-offs amongst network miners.

Source: CryptoQuant

Likewise, the coin’s Miner to Exchange Flow measured during the same period has recorded a 45% growth.

Read Bitcoin’s [BTC] Price Prediction 2024-25

When it surges, it means that miners are selling more BTC than they are mining for profit. 

Still facing significant resistance at the $43,000 price level, BTC exchanged hands at $42,085 at press time. According to data from CoinMarketCap, the coin’s value has grown by 5% in the last week.