Bitcoin miners experienced a substantial shakeup as they unloaded over 10,000 BTC daily, marking the most significant daily reserve decline in over a year. On Jan 17, according to data from CryptoQuant, Bitcoin miner reserves plummeted by 10,233 BTC, translating to approximately $450 million in Bitcoin value.
Accumulating and selling are typical cycles that miners go through. In June of the next year, a Bitfinex report showed that miners accumulated bitcoins during lower prices and unprofitability. But miners passed to the selling mode with modern upticks of Bitcoin price and profitability.
Miners frequently offload their coins to replenish liquidity or sell at the peak of a bull run. This pattern of economic history illustrates their tactical reaction to market conditions. The BTC price was still between $4200 and 3k when the monumental sell-off occurred.
The numbers show that Bitcoin miner reserves, which are about 1.83 million coins, have dipped to the lowest levels since July last year. Although this is a decrease, they still retain an impressive market capitalization of about $78 billion. Fallen by 22,800 BTC in the past year, the reserve chart has remained relatively low since early last year.
Bitcoin Selling Concerns: Rising MPI, Low Hash Rates
Concerns about potential selling were heightened when the Bitcoin Miners’ Position Index (MPI) began to rise on Jan 15, signaling imminent selling activities. The MPI is calculated as the ratio of total miner outflow in USD to its one-year moving average of total miner outflow in USD.
Mining operations encountered challenges, with average hash rates dropping to their lowest levels since Oct. The hash rates reached around 400 exahashes per second (EH/s), as reported by Bitinfocharts. Some large mining facilities in Texas took precautions by powering down certain operations amid extreme cold weather conditions. They prioritized energy preservation for the state.
The shift in miner behavior, characterized by a notable daily decline and operational adjustments, highlights the dynamic nature of the cryptocurrency market. It reflects miners’ adaptability to evolving market conditions and the broader economic landscape of Bitcoin.
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