Bitcoin Miners Sell As Mining Revenues Come Under Stress
Data shows Bitcoin miners have been selling in recent weeks as their revenues have come under stress due to the struggling price of the crypto.
Bitcoin Miners Are Currently Selling An Average Of 3.3k BTC Per Month
As per the latest weekly report from Glassnode, miners had been accumulating during the initial drawdown from the all-time high, but recently they have broken out of the trend and started distributing.
The relevant metric here is the “miner net position change,” which measures how much Bitcoin exited or entered wallets of miners on any given day.
When the value of this indicator is positive, it means the miner reserve is currently observing an increase in its value.
Such a trend, when prolonged, can be a hint that miners are accumulating at the moment. Naturally, this can be a bullish signal.
On the other hand, a negative value suggests miners are withdrawing a net amount of coins from their wallets right now.
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Usually, miners transfer coins out of their reserve for selling them at exchanges. So, such values can be bearish for the crypto’s price.
Now, here is a chart that shows the trend in the Bitcoin miner net position change over the last few years:
The value of the indicator seems to have been negative recently | Source: Glassnode's The Week Onchain - Week 23, 2022
As you can see in the above graph, the Bitcoin miner reserve was observing positive change for a few months following the decline from the all-time high.
However, as the price continued to struggle, the trend started to shift. In the last few weeks, miners have distributed a peak amount of 5k to 8k BTC per month.
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One of the main reasons behind this change is the struggling miner revenues during the last few months. This is illustrated by the Puell Multiple chart below:
Looks like the value of the metric has been going down in recent months | Source: Glassnode's The Week Onchain - Week 23, 2022
The Puell Multiple measures how the current USD price of Bitcoin compares with its 365-day average value. During early bull stages, the indicator’s value remains between 0.6 and 1.5.
The lower the value of the metric gets, the more miner revenues come under stress. Historically, values lower than 0.6 have accompanied miner capitulation events.
At the time of writing, Bitcoin’s price floats around $29.4k, down 7% in the last seven days. Over the past month, the crypto has lost 18% in value.
The price of BTC looks to have sharply plunged down over the past day | Source: BTCUSD on TradingView
Featured image from Unspash.com, charts from TradingView.com, Glassnode.com