On-chain data shows that Bitcoin miners may have once again been participating in selling recently, something that could lead to the asset declining.
Bitcoin Miner Reserve Has Been Declining In The Last Two Weeks
As pointed out by an analyst in a CryptoQuant post, the BTC miner reserve has been observing outflows recently. The “miner reserve” here refers to the total amount of Bitcoin that the miners as a whole are holding in their wallets right now.
When the value of this metric goes up, it means that these chain validators are transferring coins into their addresses currently. This kind of trend can be a sign that the miners are accumulating, and hence, can be bullish for the price of the asset.
On the other hand, the indicator trending down suggests the miners are taking BTC out of their wallets at the moment. Generally, these investors withdraw coins from their reserve for selling-related purposes, so such a trend can have bearish consequences for the cryptocurrency’s value.
In the context of the current discussion, the miner reserve itself isn’t of interest, but rather its “rate of change” (ROC) is. This metric keeps track of the percentage changes in the miner reserve over a specific period. Here, the relevant period is the 14-day one.
Now, below is a chart that shows the trend in the 14-day ROC of the Bitcoin miner reserves over the last few months:
Looks like the value of the metric seems to have been negative in recent days | Source: CryptoQuant
As shown in the above graph, the 14-day ROC of the miner reserve had been green last month as Bitcoin had rallied above the $30,000 level. These positive values of the indicator imply that the miner reserve had been rapidly going up.
The timing of these positive ROC values could suggest that the accumulation from the miners might have provided support for the surge in the cryptocurrency’s price.
In the first week of this month, though, the metric turned negative, implying that the miner reserve started to decline. The miners look to have continued to withdraw coins from their wallets since then, as the indicator’s value has remained red.
The Bitcoin price has been struggling in this period, as it hasn’t been able to mount up any significant moves. It would appear that this selling from the miners (if the withdrawals are indeed happening for selling) might be one of the factors behind the asset stalling in the past couple of weeks.
Since the 14-day ROC of the miner reserve has continued to be at notable red values recently, it’s possible that these chain validators aren’t letting up their selling just yet.
So far, the price has continued to hold on above the $30,000 level, implying that there may be enough demand in the market to absorb any selling from the miners for now. However, if the miners continue to sell into the near future, it’s possible the asset may buckle and the price could face a drawdown.
At the time of writing, Bitcoin is trading around $30,000, down 1% in the last week.
BTC has been moving sideways recently | Source: BTCUSD on TradingView