Bitcoin (BTC) miners are piling up en masse, is the capitulation over?
According to on-chain data aggregated by CryptoQuant, it appears that Bitcoin (BTC) miners have switched from sellers to holders. In fact, they now have the largest amount of BTC since January 2021. Is the impact of the past few weeks’ turmoil wearing off?
Miners accumulate Bitcoin (BTC)
This is a relatively interesting indicator of the development of the cryptocurrency market: the behavior of bitcoin miners (BTC). While they had recently shown strong signs of capitulation, mostly selling the BTC they mined, The trend seems to have completely reversed.
As a reminder, capitulation occurs when the holders of an asset are tired and give up their previous gains. by selling their positions in a bear market. After several weeks of a significant latent cryptocurrency deficit, many investors have already started selling at a loss.
And that was especially true for miners, who massively sold their Bitcoins in free fall from $30,000 to $20,000 last June. However, as a recent analysis by CryptoQuant shows, their market sentiment appears to have reversed: the amount of BTC in their wallets reached a new high since January 2021.
Bitcoin Miners Reserve (BTC)
As of July 29th, the combined balance of all recognized bitcoin mining wallets amounted to 1,865,272 BTC. Although there was a slight drop in early August, the surge is still evident with a total of 1,864,842 BTC as of August 3. Between early July and today this figure is up 0.37% or 6,885 BTC.
In other words, it appears that miners have bitcoin reserves completely absorbed the surrender of the month of June. This was particularly felt in the fundamentals of the network, with a drop in hash rate which reflects the abandonment of the less profitable miners.
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Miners are selling less and less BTC
Other indicators also testify to this the phase of miner capitulation may be coming to an end. One of them is the number of BTC transferred from recognized wallets by miners to exchanges.
Bitcoin (BTC) miners influx to exchanges
It’s easy to see that the sudden drop in the market this past June that took bitcoin from $30,000 to less than $20,000 in a matter of days has led to this Effects on the behavior of minors. As evidenced by the many massive spikes in June, miners are gave up their positions at a loss and discharge their bitcoin reserves.
However, over the past few weeks, bitcoin price has stabilized. This obviously helped to ease market sentiment and at the same time the coolest miners. As this chart shows, they haven’t since that dip sell no more than 1000 BTC per day in return. Additionally, miner inflows to exchanges totaled just 359 BTC on Aug. 2.
Finally, let’s consider one last indicator, somewhat similar to the previous one. The Miners’ Position Index (MPI) also provides information on this the spending and saving behavior of bitcoin miners. In short, it is the ratio between the daily total of miner outflows (in USD) and the one-year moving average of the same total.
The Bitcoin Miners Position Index (MPI)
To Our on-chain analyst Prof. Kettewho regularly performs for Cryptoast and the private group Le Grille-Pain, this graph is an excellent indicator to understand the behavior of minors:
“A high value shows that miners are sending more coins from their identified wallets than usual, indicating a potential sell-off. »
In fact, the main spikes correspond to either massive profit-taking by miners in the bullish phase or, conversely, capitulation in the face of the decline. For now, the peaks are rather diminishing. As a result, the trend for the month of July seems to be to limit spending and to accumulation.
In conclusion, it is important to remember that minors by nature very wasteful behavior. And for good reason, selling is the only way to cover the electricity costs associated with producing bitcoin.
👉 Also in the news – Bitcoin (BTC) miners capitulation – Expect another fall?
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