Bitcoin miners (BTC) appear to be selling large amounts of Bitcoin again. CryptoQuant data shows that the BTC Miner Position Index – an account that tracks the relationship between BTC exits from binary portfolios – has reached a three-year high. This trend indicates that miners may sell bitcoin on over-the-counter or spot exchanges.
According to CryptoQuant, on December 10, Bitcoin transactions for two major miners were discovered when the miner center index suddenly rose to levels not seen since 2017.
Initially, around 800 BTC worth $ 14.5 million went to Binance. Second, 11,852 BTC, equivalent to $ 215.9 million, was transferred to an unknown cold wallet.
Not the best short term signal for Bitcoin
Miners usually sell bitcoins through spot or over-the-counter exchanges. When selling occurs on spot exchanges, it can increase short-term selling pressure on BTC. The effect on BTC price is not noticeable when miners sell on OTC exchanges as they sell directly to buyers.
According to Ki Yong Joo, CEO of CryptoQuant, on December 10, miners sold “a lot” of bitcoins. While Key remains bullish on BTC’s price in January, he made clear that this is a potential worrying trend for the foreseeable future. … He said:
“Of course, miners today are selling a lot of $ BTC. I’m still high, but in the short term, that’s not the best signal.”
Other analysts asked Key if miners were selling enough Bitcoin to have a significant impact on Bitcoin’s price movements in the short term. In response, Key noted that although the total outflow is not large, the mine flow is still relatively high compared to recent days. he added:
“The total outflow is not large, but it is increasing relatively compared to previous days. The number of outbound transactions is extraordinarily high today. At the moment, the miner exchange flow to the exchange seems minimal, so I stick to my long work. Hopefully these are OTC agreements.”
Miners can put significant pressure on Bitcoin sales, especially if large amounts are traded en masse on exchanges. However, in the medium to long term, an organization’s buildup of BTC can offset sales.
Why is it not so worrisome in the medium term
Cointelegraph reported in May that the Grayscale Bitcoin Trust (GBTC) collected more bitcoins than was mined.
In recent months, Grayscale has continued to increase its $ 10 billion in asset management reserves. If this trend continues, it may help offset selling pressure from miners and whales in the short to medium term.
In October, Dan Tabiro, co-founder of 10T Holdings, said Bitcoin may also face a potential supply crisis.
Miners can withdraw bitcoins in the short term, but bitcoins have repeatedly failed to breach the $ 19,600 resistance level. Therefore, it can be said that the miner sale is taking place at a time when investors are already anticipating a sharp correction.
Additionally, indicators on the net, such as lower currency flows and bitcoin foreign exchange reserves at their lowest level since August 2018, could also offset the short-term downtrend, preventing BTC from falling further to $ 16,000 or maybe less.