Bitcoin Bearish Signal: Miners Keep Dumping

Data shows that Bitcoin miner reserves have continued to trend downward recently, suggesting that miners have been dumping their coins.

Bitcoin miners have been withdrawing from their wallets for the past few days

As pointed out by an analyst in a CryptoQuant post, BTC mining reserves have seen negative change recently, which could lead to a decline in the price of the crypto.

The “miner reserves” is an indicator that measures the total amount of Bitcoin currently present in the wallets of all miners.

When the value of this metric goes up, it means that miners are depositing more coins into their wallets right now. Such a trend, when extended, could be bullish for the value of BTC as it could be a sign of accumulation from these network validators.

On the other hand, a decrease in the indicator suggests that miners are transferring coins from their reserves at the moment. Since miners usually withdraw the BTC for selling purposes, this kind of trend can turn out to be bearish for the crypto.

Now, here’s a chart showing the trend in Bitcoin mining netflow, a metric that records percentage changes in total miner reserves over the past few months:

Looks like the indicator has noticed negative changes in recent days | Source: CryptoQuant

Negative mining net flows indicate that the reserves are decreasing, while positive values ​​mean that they are registering an increase.

As you can see in the graph above, the value of this BTC indicator had been above zero earlier in the month, but recently it has been underwater.

This may indicate that these miners have been dumping for the past few days. As can be seen from the chart, every time the reserve has seen negative changes in recent months, the BTC price has taken a hit.

This time too, the value of Bitcoin has registered a decline while these recent red values ​​for the mining reserve have persisted. It is possible that if miners continue the trend of dumping, the crypto may observe further decline, at least in the short term.

BTC price

At the time of writing, Bitcoin’s price is hovering around $21.4k, down 8% in the last seven days. Over the past month, the crypto has lost 4% in value.

The chart below shows the trend in the price of the coin over the last five days.

The value of the crypto has been mostly moving sideways in the last few days since the plunge | Source: BTCUSD on TradingView

Featured image from Joshua J. Cotten on Unsplash.com, charts from TradingView.com, CryptoQuant.com