The amount of Bitcoin (BTC) held in reserve by mining companies has hit lows last seen in October 2022.
Mining reserves are important in the bitcoin market
According to on-chain analytics firm CryptoQuant, bitcoin miners only had 1.83 million BTC in their wallets as of March 9, down from the previous low of 1.91 million BTC recorded on October 12, 2022.
CryptoQuant employs a machine learning (ML) technique to detect miners’ wallet addresses and track their holdings. Includes wallets associated with miners or mining pools that accumulate BTC but do not actively mine it.
The sum of the bitcoins held in those wallets is what the analytics firm calls a “miners reserve” and is an important indicator of BTC prices.
When the value of this indicator rises, it means that miners are adding more BTC to their wallets, and when it falls, it means that they are selling their holdings. Usually, the bitcoin price can fall as long as the indicator shows a selling trend like the current one.
Due to the large number of bitcoin miners they have, miner sales patterns have a significant impact on the broader crypto market.
Miners looking to profit from recent price hike
According cryptoquantificationDespite several on-chain metrics showing encouraging signs, the mineral reserve indicator points towards a more bearish trend, especially considering that it has hit new yearly lows.
The BTC miner pool has been declining ever since the price of the cryptocurrency began to rise. It suggests that miners saw the price increase as a profitable exit opportunity to offset declining profits as the market suffered.
Miners often sell parts of their properties to cover ongoing operating expenses, such as electricity bills. Large sales, on the other hand, can indicate that you are struggling more than usual to make ends meet.
By CoinMarketCap, the bitcoin price has skyrocketed by more than 45% since the beginning of the year. Miners have taken advantage of the short bull run and improving BTC prices to dump some of their holdings to offset high expenses caused by a surge in global energy prices and severe network conditions.
