Bitcoin lost 10% in the week to date. Following a major crash, the number-one crypto in market capital has been steadily consolidating at their current levels following a drop of more than 10% over the last week.
Similar reading: Is Small-Cap Crypto Assets Rebounding An Sign of Risk Appetite Returning| Are Small Cap Crypto Assets Rebounding A Sign Risk Appetite Returning?
At the time of writing, BTC’s price trades at $20,400 with sideways movement in the last 24 hours.
According to many news outlets, Bitcoin miners have begun to reduce their BTC holdings. This has contributed to the selling pressure and to BTC’s price plunging to its current levels from the $30,000 area.
A recent report by analytics firm Coin Metrics looked into BTC miners’ addresses, and funds flow to pin down Bitcoin’s crash real impact on the sector. As the firm claims, the process of tracking down BTC miners’ addresses can be difficult, despite the transparency of the blockchain.
In order to get a clear picture of current miners’ BTC holdings, Coin Metrics labeled the addresses which have come in contact with mining pools. The rewards of including a block into the blockchain were split by these miners who combined their resources.
The rewards are greater if miners pool their resources. The pools can interact with BTC addresses Coin Metrics call 0 Hop miners. After that, the split rewards go directly to miners or 1 Hop addresses.
The firm discovered that there were 2.9 million 1-hop miner. This is not the number of addresses that have ever been used to mine 1 BTC. Since January 2021, when the sector was more industrialized, this number has fallen.
This means that active Bitcoin miners addresses will interact with mining pools for 34,000 by 2022. It is much less than the all-time peak of 34,000 and compares to 2021, when it was 92,000.
Bitcoin Miners Reduce Holdings, But Remain Bullish
Since July 2020, the total number of 1-hop BTC address addresses that have been selling Bitcoin has exceeded 200,000. The price of Bitcoin is inversely related to this metric. The cryptocurrency price rose while the BTC supply at these addresses trended downwards.
From June 2022, when price volatility impacted the market, these entities sold at most 500,000 BTC. The following shows that even though active miners reduced their supply, they only sold around 25.000 BTC.
Parker Merritt, Coin Metrics Analyst, added these words to the latest findings:
While most miners prefer HODLing, last week’s market turbulence threw many miners for a loop. With the wick below $18K many companies had to liquidate their BTC Treasurys in an effort to mitigate the effects of a margin-call.
Controlling The Chaos: Alameda Ventures Bails Out Voyager With $200M & 15K BTC| Controlling The Chaos: Alameda Ventures Bails Out Voyager With $200M & 15K BTC
The chart shows an increase, which may indicate a new period for BTC accumulation by miners. In general, less leverage on the crypto market may lead to healthier price actions.