On-chain data shows that bitcoin miners have been selling recently, but this quant has argued that this sell-off should not have much impact on the market.
bitcoin Mining Reserve Has Recorded a Decline Recently
In a quick shot from CryptoQuant bitcoin-reserves-by-miners-as-discussed-on-X-and-various-portals” target=”_blank” rel=”nofollow”>mail, an analyst analyzed the latest selling pressure that miners have been putting on the market. The indicator of interest here is the “mining reserve”, which tracks the total amount of bitcoin that the combined miners have in their wallets at the moment.
Naturally, this metric can provide insights into the collective behavior of these chain validators. Generally, miners withdraw their coins from their reserve when they want to sell them, so a drop in the indicator can have bearish consequences for the asset.
On the other hand, an increase in the metric may be bullish for the cryptocurrency price as it suggests that miners as a whole are in accumulation mode right now.
Now, here is a chart showing the trend in the bitcoin mining pool over the past year:
<img decoding="async" class="alignnone aligncenter" src="https://technicalterrence.com/wp-content/uploads/2024/01/Bitcoin-miners39-sell-off-poses-39negligible-impact39-Quant-maintains.png" alt="bitcoin Mining Reserve” width=”1280″ height=”968″ loading=”lazy” data-recalc-dims=”1″/>
The value of the metric seems to have been heading down in recent days | Source: bitcoin-reserves-by-miners-as-discussed-on-X-and-various-portals" target="_blank" rel="nofollow">CryptoQuant
As shown in the chart above, bitcoin miners' reserve has been declining since October, implying that this cohort has withdrawn a net amount of btc from their wallets during this period.
This latest sell-off of miners has recently been a topic in the community, with many speculating on the possible bearish impact arising from it. However, the quant has a different opinion on this matter.
“The massive sale of bitcoin reserves by miners, as discussed on X and various portals, is unfounded,” explains the analyst. To support this claim, the quant has pointed out the exact numbers involved here.
Before this sale began, the mining reserve was worth around 1,84,997 btc. Following the decline that the indicator has experienced since then, miners now own around 1,833,222 btc.
This represents a decrease of 12,755 btc, which, while substantial on its own, doesn't seem too large in the grand scheme of things, especially considering the size of the mining pool itself. “The minimum amount of bitcoin sold has a negligible impact on the market,” says the analyst.
<img loading="lazy" decoding="async" class="alignnone aligncenter" src="https://technicalterrence.com/wp-content/uploads/2024/01/1706710089_984_Bitcoin-miners39-sell-off-poses-39negligible-impact39-Quant-maintains.png" alt="bitcoin Miner inputs and outputs” width=”1280″ height=”593″ data-recalc-dims=”1″/>
The trend in the miner inflows and outflows over the past couple of months | Source: bitcoin-reserves-by-miners-as-discussed-on-X-and-various-portals" target="_blank" rel="nofollow">CryptoQuant
The graph above shows the data of bitcoin inputs and outputs made by miners. In fact, recently there have been capital outflows, which is why there is talk of liquidation.
At the same time, inbound transaction volume has also remained at significant levels, offsetting these outflows. This is the reason for the relatively small net decrease in the total mineral reserve.
btc Price
bitcoin had recovered past the $43,000 mark earlier, but the asset saw a setback over the past day as it fell back towards $42,500.
<img loading="lazy" decoding="async" class="alignnone size-medium aligncenter" src="https://www.tradingview.com/x/PfoKi4Rh/" alt="bitcoin price chart” width=”1534″ height=”862″/>
Looks like the price of the coin has retraced some of its recent recovery | Source: BTCUSD on TradingView
Featured image from Shutterstock.com, Charts from TradingView.com, CryptoQuant.com
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