Bitcoin bearish signal: miners keep selling

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On-chain data shows that Bitcoin miners have continued selling recently, a sign that may be bearish for the price of the cryptocurrency.

Bitcoin Miner Reserve Shrinks Since Start of Rally

As one analyst pointed out in a CryptoQuant article, BTC miners have continued to withdraw coins from their stash recently. Miner Reserve is an indicator that measures the total amount of Bitcoin that all miners currently hold in their wallet.

Related Reading: Bitcoin Emerges as King of Assets, Growing 10x Than Gold During US Banking Crisis

When the value of this metric increases, it means that miners are depositing a net number of coins into their wallet. This trend suggests that these blockchain validators are hoarding cryptocurrency. As miners are often a source of selling pressure in the market, holding them and increasing their supply can be bullish for the price.

On the other hand, a decreasing value of this indicator implies that miners transfer part of the BTC out of their reserve. Since one of the main reasons these investors may withdraw from their portfolio is for sale-related purposes, such a trend can have downward consequences on the value of the assets.

Now, here is a graph that shows the trend of the Bitcoin miner pool over the past year:

The value of the metric seems to have fallen in recent days | Source: CryptoQuant

The chart above shows that Bitcoin’s miners’ reserve fell sharply just at the start of the rally in January, suggesting that these investors sold off to take advantage of the profit-taking opportunity. The drop in the metric was also quite steep in this case and surpassed the levels seen during the FTX crash last November.

The pool of miners has only moved sideways or downwards since this sell-off, suggesting that these holders have not participated in any accumulation over the past few months; they only tried to get out of it.

Recently, when Bitcoin dipped from the $30,000 mark, the indicator saw a sharp drop again, meaning this cohort was once again selling their BTC.

The decline in the indicator has also continued thanks to the price volatility seen in recent days, suggesting that BTC miners are still dumping their coins.

Although these investors have sold a net amount of coins recently, the actual scale of their sale is not that large compared to their total supply (they currently hold over 1.82 million BTC in their wallets).

The quant notes, however, that miners holding their coins for longer periods of time could be one of the crucial factors for the health of uptrends.

It remains to be seen if these holders will be able to reverse the trend anytime soon or if they will continue to sell Bitcoin in the short term. Either possibility is likely to have a profound effect on the price of BTC.

BTC price

As of this writing, Bitcoin is trading around $28,100, up 3% in the past week.

Looks like the value of the asset has plunged in the last day | Source: BTCUSD on TradingView

Featured Image of Becca from Unsplash.com, Charts from TradingView.com, CryptoQuant.com

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