On-chain data shows that bitcoin miners have recently paused their selling, a signal that could be bullish for the cryptocurrency's price.
bitcoin's miner pool has experienced a sideways movement recently
As An analyst at a CryptoQuant Quicktake publication reportedThe selling pressure from miners has recently decreased. The indicator of interest here is the “Miners Reserve”, which keeps track of the total amount of bitcoin that miners are holding in their wallets.
When the value of this metric decreases, miners make net withdrawals from their addresses. Miners usually transfer their coins when they want to sell them, so this trend can have potential bearish consequences for the asset.
On the other hand, the increasing indicator implies that miners are receiving a net amount of coins in their balance. Such accumulation by these chain validators can naturally be a bullish signal in the long term.
Now, here's a chart showing the trend in the bitcoin miner pool over the past year or so:
<img decoding="async" class="alignnone aligncenter" src="https://technicalterrence.com/wp-content/uploads/2024/08/Bitcoin-Miners-Selling-Pressure-Eases-Time-for-a-New-Rally.png" alt="bitcoin Miners Pool” width=”1280″ height=”716″ data-recalc-dims=”1″/>
The value of the metric appears to have been following a flat trajectory in recent days | Source: CryptoQuant
As seen in the chart above, the bitcoin Mining Reserve had been in a downtrend since the beginning of the year, but around the end of July, the indicator finally changed its trajectory.
The change has not yet been upward, however, as the metric has only moved sideways. Nonetheless, it still suggests a break from the steady selling that miners engaged in for most of the year.
Historically, miners have been a group on the bitcoin network that has engaged in regular sales, as they need to pay their operating costs, such as electricity bills, somehow.
It is therefore not usually surprising that miners' reserves are declining, and more often than not, the market quickly absorbs any sales they make. However, as recently seen, constant selling pressure can be detrimental to the asset.
Initially, the sell-off did not impact bitcoin as there was a lot of demand in the market through the new exchange-traded funds (ETFs), and btc was able to rally towards a new all-time high (ATH).
However, demand stopped after the ATH as miners continued to apply their selling pressure. This may be the reason why btc has fallen into a consolidation phase since then.
As these chain validators appear to have recently finished their net selling, bitcoin may find it easier to build up bullish momentum in tandem.
That said, it remains to be seen whether the sideways trajectory in the mining pool will continue or whether miners will take advantage of another profitable opportunity to sell if btc starts a rally.
btc Price
bitcoin has continued its sideways trajectory recently as its price is still trading around $58,200.
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Looks like the price of the asset hasn't fluctuated much recently | Source: BTCUSD on TradingView
Featured image by Dall-E, CryptoQuant.com, chart by TradingView.com
