On-chain data shows miners have sent a never-before-seen amount of Bitcoin to exchanges as the crypto touches $55k.
Bitcoin Miners Send An Unusual Amount Of Coins To Exchanges
As pointed out by a CryptoQuant post, on-chain data shows miners have sent an unprecedented amount of Bitcoin to exchanges.
The indicator of relevance here is the “miner netflow.” This metric shows the net amount of coins that miners have been sending to exchanges.
When the miner netflow turns negative, it means they are withdrawing more coins to personal wallets than they are sending to exchanges. Such behavior would imply they are bullish on the price and feel buying pressure.
On the other hand, positive values of the indicator show that miners are sending more Bitcoin to exchanges than they are withdrawing. Such values usually mean there is an increase in the selling pressure among them.
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Now, here is a chart showing the trend in the metric over the last few years:
Miners seem to have started dumping BTC on exchanges | Source: CryptoQuant
As the above chart shows, the netflow is showing a very large positive spike. Such a value of the metric is unprecedented for Bitcoin.
Miners moving around their coins can have visible effects on the crypto’s price as they are, after all, the original whales.
Normally, a big amount of coins being dumped on exchanges would lead to a dip in the price of Bitcoin. While BTC being pulled off exchanges would have the opposite effect.
But there seems to be an interesting trend that occurs with miner netflows. During the 2017 and 2021 bull runs, both, miners failed to catch the top and sold off early around the first price peak.
The price did depreciate a bit after they dumped their Bitcoin, but there were enough buyers in each run to offset their inflows, and the price went on to go much higher.
At the time of writing, Bitcoin’s price floats around $54k, up 25% in the last seven days. Over the past month, the crypto has gained 6% in value.
The below chart shows the trend in the price of the coin over the last five days.
BTC's price makes a big move up | Source: BTCUSD on TradingView
Bitcoin showed a very strong move up yesterday as the coin’s price went as high as $55.5k. Now that miners have started selling here, it’s possible the crypto could see a correction soon.
However, if the trend of miners failing to catch the cycle top continues, then it’s possible the price could go even higher. Though that is only if there are enough other buyers in the market still.