bitcoin price has been in good recovery form in recent days, breaking back above $43,000 this week. However, the latest on-chain data shows that miners have been offloading their btc as they appear to be engaging in a liquidation ahead of the April halving event.
Miners sell $600 million worth of btc in two days: CryptoQuant
In a CryptoQuant quick take In a post, a pseudonymous analyst revealed that bitcoin miners' reserves have decreased in recent days. The relevant metric here is the “mining reserve,” which tracks the total amount of btc held in the wallets of affiliated miners.
Typically, this figure represents the supply of bitcoin that miners have yet to sell on the open market. According to on-chain intelligence firm CryptoQuant, a drop in miners' reserves often suggests potential selling pressure for the flagship cryptocurrency.
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A chart showing the btc miner reserve and price | Source: btc/chart/miner-flows/miner-reserve?miner=all_miner&window=DAY&sma=0&ema=0&priceScale=log&metricScale=linear&chartStyle=line" target="_blank" rel="noopener nofollow">CryptoQuant
According to data from CryptoQuant, miners' reserves have plummeted by more than 14,000 btc (worth about $600 million) in the last two days. The “mineral reserve” metric has been trending downward since August 2022.
This latest drop has taken the indicator to its lowest level in almost three years (since July 2021). While miners could be transferring substantial amounts of bitcoin from their wallets for various reasons, selling is one of the most likely reasons for the movement of funds.
In fact, the pseudonymous author of the Quicktake post mentioned that “interaction on the exchange by miners” has increased in recent weeks. This interaction has intensified since the start of spot ETF trading in the US, the analyst noted.
This argument is further supported by the “btc/chart/inter-entity-flows/miner-to-exchange-flow-total?fromMiner=all_miner&toExchange=all_exchange&window=DAY&sma=0&ema=0&priceScale=log&metricScale=linear&chartStyle=column” rel=”nofollow noopener” target=”_blank”>“Miner to Exchange Flow Indicator”, which has been increasing in recent weeks. This metric measures the amount of bitcoin that miners are moving to centralized exchanges. Generally, investors transfer their coins to these platforms to sell them.
These miner sell-offs often have no impact on the price of bitcoin as the market easily absorbs bearish pressure. However, this on-chain perspective offers insight into market dynamics and the crypto ecosystem.
bitcoin price
At the time of writing, bitcoin price is down just 0.1% while trading just above $43,100. Meanwhile, the leading cryptocurrency has recorded a gain of over 3% in the weekly period.
btc continues to maintain its position as the largest cryptocurrency in the sector, with a market capitalization of approximately $846 billion.
<img loading="lazy" decoding="async" class="aligncenter size-medium" src="https://technicalterrence.com/wp-content/uploads/2024/02/Bitcoin-miners39-reserves-fall-to-lowest-level-since-2021-a" alt="bitcoin” width=”2174″ height=”1434″/>
The bitcoin price surges toward $44,000 on the daily timeframe | Source: BTCUSDT chart on TradingView
Featured image from iStock, chart from TradingView