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Bitcoin is currently down below $27,000 as data from the network suggests that miners may have been selling the asset recently.
The reserve of bitcoin miners recently fell sharply
As the analyst pointed out in a CryptoQuant message, over the past day, miners have withdrawn about 1,750 BTC from their wallets. The relevant indicator here is “miner churn”, which measures the total amount of Bitcoin that miners are currently transferring from their wallets.
The analog outflow metric is called “inflow” and it naturally tracks the total number of coins flowing into the addresses of these blockchain validators.
Here is a chart showing the trend of bitcoin miner outflows as well as inflows over the past few weeks:
Looks like the churn value has been quite high in recent days | Source: CryptoQuant
Whenever the influx of miners is significant, it means that this group is depositing a large amount of Bitcoin into their wallets. Such a trend, if it continues, could be a sign that miners are piling up right now. Naturally, this can be bullish on the price.
On the other hand, when the churn is high, it indicates that a large amount of the asset is leaving the supply of miners. Typically, the main reason these holders move their coins out of their wallets is for selling purposes, so this trend could be bearish for the value of the cryptocurrency.
In the chart above, you can see that the inflow of miners has been at a relatively low level over the past day, which means that these investors are not depositing significant amounts into their wallets.
However, the outflow of miners over the same period registered a fairly high surge. In total, about 1,750 BTC ($47 million) came out of the miner’s supply with this indicator spike.
Since there were no inflows to counter these outflows, the net asset value has now left the miners’ wallets. This would mean that if the outflow was made for the purpose of selling, there would have to be a net bearish effect on the price.
An indicator that helps to better determine whether these transfers were for sale is “miner flow to exchange”, which only tracks miner outflows heading towards centralized exchanges.
Typically, this group uses exchanges when they want to participate in a distribution. However, as shown in the chart above, the rate has remained low recently, meaning that these outflows have not flowed directly into the wallets of these platforms.
However, the analyst found that the target churn wallet of 1750 miners made another transfer, which was indeed sent to the exchange. “There is a high possibility that 1750 BTC ended up with Binance,” the analyst explains.
When this outflow happened yesterday, Bitcoin was above the $27,000 level. However, the asset fell after them and is now below that level, suggesting that this latest pressure from miners may have been the reason for the decline.
Bitcoin Price
At the time of writing, Bitcoin is trading around $26,800, up 2% over the past week.
BTC Declines Today | Source: BTCUSD on TradingView
