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Bitcoin Outflows From Miner Wallets Plummet To A Multi-Month Low — And That’s Crazy Bullish

Mining 2021/04/29 21:43 by Brenda Ngari
Bitcoin Outflows From Miner Wallets Plummet To A Multi-Month Low — And That’s Crazy Bullish

Bitcoin miners mostly operate with fiat money and are repetitive sellers in the market, liquidating a portion of their stash to finance their daily operational expenses such as electricity costs. 

However, it seems that they are currently hoarding their newly minted coins as they have no incentives of cashing out at current prices. A reduction in the transfers to exchanges by miners suggests that they expect higher prices in the near future.

Bitcoin Miners Are Back To Accumulation Mode 

Data from on-chain monitoring resource Glassnode shows miners’ balances have been increasing. In particular, Glassnode observed that the coins transferred from miners to exchanges dropped to 49.893 BTC, the lowest level in four months.

In January and early February, miners were sending huge chunks of their holdings to exchanges. To put it another way, peak profit-taking and distribution took place at that time. Now, however, bitcoin miners are firmly holding onto their coins. Additionally, Glassnode’s miner position net change metric which shows the 30-day change of the supply held in miner addresses has been flashing green this month — another sign that miners are not selling their coins.

With the renewed accumulation by miners, bitcoin looks set for a remarkable ascent. Such declines in miner outflows have preceded price rallies in the past, though they don’t necessarily mean a rally is on the way. 

Bitcoin On Track To Close Its First Negative April Since 2015

The performance of bitcoin has been nothing short of impressive this year, but investors waiting for a record-setting monthly candle are likely in for a big disappointment.

April has typically been a strong month for bitcoin in its 12 years of existence, posting positive gains for five years in a row since 2016. At -7.42%, April 2021 is the flagship cryptocurrency’s worst April since 2015 despite nabbing a new historic high just two weeks ago, data from crypto aggregator Bybt indicates

With less than 48 hours to go until the new month of May, bitcoin is worth $54,308 at press time, having briefly bounced to over $56K on hearsay that Facebook had invested in BTC. These rumors were later squashed after the social media giant released its Q1 2021 earnings report.

Whether the latest decrease in miner transfers to exchanges yields a notable price rally is anyone’s guess.

Bitcoin Outflows From Miner Wallets Plummet To A Multi-Month Low — And That’s Crazy BullishBTCUSD Chart By TradingView

In the short-term, it’s vital for bitcoin to strongly break above the $55,000 psychological support level. If it can move past this region, the chances of seeing a massive upsurge above $60,000 greatly increase. 

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