Bitcoin miners are liquidating their holdings against the background of fiscal consolidation and sluggish crypto sector development. Lark Davies, a crypto YouTuber, said that this has been occurring since the beginning of the crypto market meltdown.
Typically, miners retain tokens during down markets and sell them after the bear market has gone. Consequently, miners may maximize their profits.
However, selling during a decline shows that miners anticipate additional Bitcoin price declines.
Davies published a Glassnode graph depicting the Bitcoin miner’s net change position, which refers to the 30-day rate of change in miners’ unspent supply, or the change in supply stored in miners’ addresses.
Recent behavior reveals a substantial decline in miner distribution during the last few weeks, ranging from -5,000 to -8,000 BTC each month.
Since then, the figures have decreased to a current net change position of -3,300 BTC/month, indicating that the trend may reverse in the next weeks.
Prior to this, a negative net position move of this magnitude happened between January and April of 2021. This period reached a maximum of -26,000 BTC/mo.
Bitcoin surged to a new all-time high of $65,000 between January 2021 and mid-April 2021. This phase was marked by euphoric disbelief and red-hot overbought Relative Strength Index (RSI) values.
Typically, miners sell Bitcoin during times of market strength, such as January to April 2021, and keep tokens during market declines.
The recent negative shift in net position, however, is contrary to expectations.
Will Foxley, a director at Compass Mining, said that the decision is only a precautionary response to the macro environment, as opposed to a clear indication of miner pessimism. He stated that selling Bitcoin at this time is a wise decision for maintaining mining operations throughout the uncertainties.
He believes that miners are only discussing the macro climate and that it would be good to sell Bitcoin at current prices in order to maintain operations secure.
The result will maintain selling pressure on the dominant cryptocurrency until miners have adequate liquidity to continue operations.
In the meanwhile, Bitcoin reversed its weekly slump of nine straight weekly losses. Despite the fact that it’s too early to proclaim a bottom, particularly in light of macroeconomic uncertainties, the news is a welcome respite for investors.