Original title: This is not a good signal-Bitcoin miners’ selling risk hits a three-year high
Bitcoin miners seem to be selling large amounts of BTC again. CryptoQuant’s data shows that the Bitcoin Miner Position Index-a measure of the rate at which Bitcoin leaves miners’ wallets-reached a three-year high. This trend indicates that miners may sell BTC on off-site or spot exchanges.
Bitcoin Miner Position Index Source: CryptoQuant
According to data from CryptoQuant, on December 10, two large bitcoin transactions related to miners were discovered, when the miner position index suddenly soared to a level not seen since 2017.
First, about 800 BTC (worth $14.5 million) were transferred to Binance. Secondly, 11852 BTC (equivalent to $215.9 million) was transferred to an unknown cold wallet.
Outflow of Bitcoin Miners’ Funds Source: Ki Young Ju
Not a good short-term signal for Bitcoin
Miners usually sell bitcoin through spot or over-the-counter trading platforms. When there is a sell-off on spot exchanges, it may intensify the recent selling pressure of Bitcoin. When miners sell on an over-the-counter trading platform, they will not have an immediate impact on the price of Bitcoin because they are selling directly to buyers.
According to CryptoQuant CEO Ki Young Ju, miners sold a “large amount” of Bitcoin on December 10. Although Ki is still optimistic about the Bitcoin price in January next year, he explained that this may be a worrying trend for the foreseeable future. He said:
“Obviously, miners are selling a lot of BTC. I am still bullish on Bitcoin, but this is not a good sign in the short term.”
Other analysts asked Ki whether the miners sold enough bitcoins to have a considerable impact on the short-term price movements of bitcoins. In this regard, Ki pointed out that although the total outflow is not very large, the outflow of bitcoin from miners is still relatively high compared to the last few days. He added:
“The total outflow of Bitcoin is not very large, but compared to the past, it has relatively increased. In addition, the outflow of txn is also abnormally high. At present, the amount of funds transferred by miners to the exchange seems to be small, so I insist on my bullish idea . I hope these outflows are only OTC transactions.”
Miners may exert tremendous selling pressure on Bitcoin, especially if large amounts of Bitcoin are sold through exchanges. However, in the medium to long term, the Bitcoin stockpiled by institutions can offset the impact of the sell-off.
Why is it not so worrying in the medium term?
In May, Cointelegraph reported that the amount of Bitcoin hoarded by Grayscale Bitcoin Trust (GBTC) exceeded the amount mined.
In recent months, Grayscale has continued to increase its Bitcoin reserves and currently manages more than $10 billion in assets. If this trend remains the same, it can offset the selling pressure of miners and whales in the short to medium term.
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