On-chain data shows the Bitcoin miners have stopped their selloff recently, a sign that could be bullish for the cryptocurrency’s price.
Bitcoin Miner Reserve Has Taken To Sideways Movement Recently
As an analyst in a CryptoQuant Quicktake post pointed out, miner selling pressure has dropped off recently. The indicator of interest here is the “Miner Reserve,” which keeps track of the total amount of Bitcoin the miners are carrying in their wallets.
When the value of this metric observes a decrease, miners make net withdrawals from their addresses. Miners generally transfer out their coins whenever they want to sell, so this trend can have potential bearish consequences for the asset.
On the other hand, the indicator going up implies the miners are receiving a net number of coins into their balance. Such accumulation from these chain validators can naturally be a bullish sign in the long term.
Now, here is a chart that shows the trend in the Bitcoin Miner Reserve over the past year or so:
The value of the metric appears to have been following a flat trajectory in recent days | Source: CryptoQuant
As is visible in the above graph, the Bitcoin Miner Reserve had been on a downtrend since the start of the year, but around the end of July, the indicator finally changed its trajectory.
However, the switch hasn’t been to the upside yet, as the metric has only been moving sideways. Nonetheless, it still suggests a break from the constant selling miners had been participating in for most of the year.
Historically, miners have been a cohort on the Bitcoin network that has participated in regular selloffs, as they need to pay their running costs, like electricity bills, somehow.
Thus, it’s usually not shocking when the miner reserve goes down, and most of the time, the market readily absorbs what selling they do. However, such as recently witnessed, constant selling pressure can hinder the asset.
Initially, the selling didn’t affect Bitcoin as there was plenty of demand coming into the market through the newly introduced spot exchange-traded funds (ETFs), and BTC was able to rally towards a new all-time high (ATH).
However, Demand paused following the ATH while miners continued to apply their selling pressure. This may be why BTC has slumped to a consolidation phase since then.
As these chain validators appear to have finished their net selling recently, it’s possible that Bitcoin could have an easier time amassing bullish momentum together.
That said, it remains to be seen if the sideways trajectory in the miner reserve will continue or if miners will pounce on another profitable opportunity to sell if BTC starts a rally.
BTC Price
Bitcoin has continued its sideways trajectory recently as its price still trades around $58,200.
Looks like the price of the asset hasn't fluctuated much recently | Source: BTCUSD on TradingView
Featured image from Dall-E, CryptoQuant.com, chart from TradingView.com
Credit: Source link
