On-chain data shows that Bitcoin miners have continued to sell recently, something that could prove bearish for the cryptocurrency’s price.
Bitcoin miners have recently lost their reserves
As noted by an analyst in a CryptoQuant after, there has been some intense pressure from miners in recent days. The relevant indicator here is the “miners’ reserve”, which measures the total amount of Bitcoin currently in all miners’ wallets.
When the value of this metric increases, it means that the miners are currently depositing a net amount of coins at their address. Such a trend could be a sign that these chain validators are currently piling up and thus could have bullish implications for the value of the asset.
On the other hand, the declining value of the indicator implies that these investors are currently taking some BTC out of their wallets. Since the miners generally only withdraw their coins when they want to sell them, this kind of trend could be bearish for the price of the cryptocurrency.
Now, in the context of the current discussion, the actual metric of interest is the 14-day rate of change (ROC) of the Bitcoin miner reserve, which tells us about the rate at which the indicator is registering fluctuations, as well as the direction in which these fluctuations are moving (negative or positive).
Here is a chart showing the trend in the 14-day ROC BTC miner reserves over the past few months:
Looks like the value of the metric has been quite red in recent days | Source: CryptoQuant
As can be seen in the chart above, the Bitcoin miner reserve’s 14-day ROC has had negative readings for the past few days. This means that the ownership of these chain validators decreases during this period.
However, not too long ago, the indicator had some positive readings, indicating that these chain validators were buying. However, things changed when the price of the asset started to fall below the $30,000 level.
When the price got around $28,000, the turn came to red values for the indicator, implying that the miners may have joined in the market-wide sell-off.
After the miner selloff, the value of the asset continued to fall, dropping all the way to the low $26,000. However, the decline has since stopped, possibly suggesting those levels may have provided the local floor for the asset.
Selling pressure from the miners has also eased recently as the latest negative peak of the statistic was smaller than the previous one, which can be seen in the chart.
Over the past day, the asset’s price has also bounced back above the $27,000 level, implying that the market may now be able to absorb the current levels of selling pressure from this cohort.
This sort of trend was also seen during the March sell-off, where the price bottomed and then bounced back up as the selling pressure faded away from the miners.
It now remains to be seen if the miners will reduce their sales in the coming days (as they did in March), or if they will continue to sell, possibly leading to more bearish price action for the asset.
BTC price
At the time of writing, Bitcoin is trading around $27,300, down 2% over the past week.
BTC has shot up during the past day | Source: BTCUSD on TradingView
Featured image from iStock.com, charts from TradingView.com, CryptoQuant.com