According to data, Bitcoin miner reserves are trending downwards in recent months. This suggests that miners may have been selling their coins.
Bitcoin miners are withdrawing money from their wallets lately
In a CryptoQuant article, an analyst noted that BTC miner reserve values have seen negative change in recent months, which could result in a decrease in the value of crypto.
The “miner reserves” is an indicator that measures the total amount of Bitcoin currently present in the wallets of all miners.
If this metric rises, miners will deposit more coins to their wallets. This trend can, if it continues for a long time, be bullish to the BTC value because it can indicate accumulation by these network validators.
A decline in this indicator could indicate that miners have been taking out their coins from their reserves. This trend could be potentially bearish as miners often take out BTC to sell.
Let’s now look at a chart of the Bitcoin miner netflows. It is an indicator that tracks the percentage change in total miner reserves over time.
The indicator seems to have noticed some negative changes recently. Source: CryptoQuant| Source: CryptoQuant
Positive netflows indicate that the reserves are declining, while negative values signify an increase.
You can see that this BTC indicator was above zero at the beginning of the month. However, it is now underwater.
These miners could be dumping these days, as this might indicate. The chart shows that when the reserve is experiencing negative changes over the past few months, then the BTC price took a dive.
The value of Bitcoin also declined this time, despite the reddish miner reserves. It’s possible that if miners continue their trend of dumping, then the crypto may observe further drawdown, at least in the short term.
At the time of writing, Bitcoin’s price floats around $21.4k, down 8% in the last seven days. The crypto’s value has fallen 4% over the last month.
Below is a chart showing the change in coin price over the past five days.
In the days following the plunge, the value of crypto currencies has been moving mostly sideways. Source: TradingView - BTCUSD| Source: BTCUSD on TradingView
Image by Joshua J. Cotten, Unsplash.com. Charts from TradingView.com and CryptoQuant.com.