According to on-chain data aggregated by CryptoQuant, it appears Bitcoin (BTC) miners have shifted from sellers to holders. Indeed, they now have the largest number of BTC since January 2021. Is the impact of the turbulence of the past few weeks fading?
Miners accumulate Bitcoin (BTC)
This is a relatively interesting indicator of the cryptocurrency market trend: the behavior of bitcoin miners (BTC). While they had recently shown strong signs of capitulation, selling mostly the BTC they mined, the trend seems to have completely reversed.
As a reminder, capitulation occurs when the holders of an asset are weary and give up their previous gains. by selling their positions in a bear market. After several weeks of considerable latent deficit on cryptocurrencies, many investors have already started selling at a loss.
And this was particularly the case for miners, who massively sold their bitcoins during the free fall from 30,000 dollars to 20,000 dollars last June. However, as evidenced by a recent analysis by CryptoQuant, it would seem that their market sentiment has reversed: the amount of BTC in their wallets hit a new high since January 2021.
Bitcoin Miners Reserve (BTC)
As of July 29, the combined balance of all recognized Bitcoin miner wallets amounted to 1,865,272 BTC. Although the beginning of August saw a slight decline, with a total of 1,864,842 BTC as of August 3, the increase is still significant. Between the beginning of July and today, this figure has increased by 0.37%, or 6,885 BTC.
In other words, it would seem that the bitcoin reserves of the miners have fully absorbed the capitulation of the month of June. This was particularly felt in the fundamentals of the network, with a drop in the hash rate which reflects the abandonment of the less profitable miners.
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Miners are selling less and less BTC
Other indicators also testify to the fact that the phase of miners’ capitulation could be coming to an end. One of them is the number of BTC transferred from recognized wallets of miners to exchanges.
Inflow from Bitcoin (BTC) miners to exchanges
It is easy to see that the sudden drop in the market last June, taking Bitcoin from $30,000 to less than $20,000 in the space of a few days, had an impact on the behavior of minors. As the many massive spikes in June indicate, miners abandoned their positions at a loss and unloaded their bitcoin reserves.
However, over the past few weeks, the Bitcoin price has stabilized. This obviously helped to calm sentiment in the market and at the same time the chilliest miners. As this graph indicates, since this plunge, they have not not sell more than 1000 BTC per day to exchanges. In addition, on August 2, inflows from miners to exchanges totaled only 359 BTC.
Finally, we will look at a last indicator, somewhat similar to the previous one. The Miners’ Position Index (MPI) also provides information on the spending and saving behavior of bitcoin miners. In a nutshell, it’s the ratio between the daily total of miner outflows (in USD) and the one-year moving average of that same total.
The Bitcoin Miners Position Index (MPI)
According our on-chain analyst Prof. Chainwhich occurs regularly for Cryptoast and on the private group Le Grille-Pain, this graph is an excellent indicator for understanding the behavior of minors:
“A high value shows that miners are sending more coins out of their identified wallets than usual, indicating a potential sell-off. »
Indeed, the main peaks correspond either to a massive profit-taking by miners in the bullish phase, or conversely to a capitulation in the face of the fall. Currently, the peaks are rather decreasing. As a result, it would seem that the trend for the month of July is to limit spending and to accumulation.
To conclude, it is important to remember that minors have, by nature, very spendthrift behavior. And for good reason, the sale is the only way to cover the electrical costs related to the production of Bitcoin.
👉 Also in the news – Capitulation of Bitcoin (BTC) miners – New fall to be expected?
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