Bitcoin Miners Are Selling Again, Will The Price Fall Again?

On-chain data suggests that bitcoin miners are once again participating in a recent sell-off, which could lead to further losses in the asset.

Bitcoin miner reserves have been declining over the past two weeks

As pointed out by an analyst at CryptoQuant PostThe BTC miner reserve has been seeing an outflow lately. The “miner reserve” here refers to the total amount of bitcoins that miners currently hold in their wallets.

When the value of this metric increases, it means that these on-chain validators are currently transferring coins to their addresses. This type of trend could be a sign that miners are accumulating, and therefore, could be bullish for the asset’s price.

On the other hand, the downward trending indicator shows that miners are withdrawing BTC from their wallets at the moment. Typically, these investors withdraw coins from their reserves for sale-related purposes, so such a trend could have bearish consequences on the cryptocurrency’s value.

In the context of the current discussion, it is not the miner’s reserve itself that is of interest, but rather its “rate of change” (ROC). This metric tracks the percentage change in miner reserves over a specific period. Here, the relevant period is 14 days.

Now, below is a chart that shows the trend in 14-day ROC of bitcoin miner reserves over the past few months:

Looks like the value of the metric seems to have been negative in recent days | Source: CryptoQuant

As shown in the above graph, the 14-day ROC of Miner Reserve was green last month as bitcoin surged above the $30,000 level. These positive values ​​of the indicator mean that the mining reserves were growing rapidly.

The timing of these positive ROC values ​​may suggest that accumulation from miners may have provided support for an increase in the cryptocurrency’s price.

However, in the first week of this month, the metric turned negative, meaning that mining reserves started to decline. It seems that since then miners have continued to withdraw coins from their wallets, as the value of the indicator remains red.

Bitcoin price has been struggling during this period, as it has not been able to make any significant moves. It appears that this sell-off by miners (if the sell-off is indeed happening) could be one of the factors behind the asset’s halving over the past few weeks.

Since the 14-day ROC of Miner Reserve has remained in the notable red values ​​lately, it is possible that these on-chain validators are not giving up their sell just yet.

As of now, the price is holding above the $30,000 level, which means that there may be enough demand in the market to absorb any selling by miners for the time being. However, if miners continue to sell in the near-term, it is possible that the asset could decline and further decline in price.

btc price

At the time of writing, bitcoin is trading around $30,000, down 1% over the past week.

BTC has been moving sideways recently | Source: BTCUSD on TradingView

Featured Image from Kanchanara on Unsplash.com Charts from Tradingview.com Cryptoquant.com