Bitcoin Miners Transfer Large Amounts to Exchanges, Signs of Selling?
On-chain data shows that Bitcoin miners have transferred many coins to exchanges today, which could be a sign of a sell-off.
Bitcoin Miner To Exchange Flow has observed a huge peak today
As pointed out by an analyst in a CryptoQuant post, a total of 1,637 BTC was deposited into exchanges by the miners today. There are a couple of relevant indicators here. The first is the “miner reserve”, which measures the total amount of Bitcoin currently sitting inside all miners’ wallets.
The second metric of interest is “miner to exchange flow”, which tells us the total number of coins that miners (all or belonging to a specific mining pool) transfer to an exchange or a group of exchanges.
As the value of this metric increases, miners deposit many coins into the exchange. This trend can have bearish implications for the price as miners usually transfer their coins from the reserves to exchanges for selling purposes.
Now, here’s a chart showing the trend in Bitcoin miner-to-exchange flow, for all miners and all exchanges:
Looks like the value of the indicator has spiked in the last few hours | Source: CryptoQuant
The above graph shows that the Bitcoin miner to exchange flow has observed a huge spike in the last day. With this big move, miners have deposited 1,637 BTC (about $44.2 million at today’s price) into exchanges.
Quant has also found that the Binance mining pool in particular was responsible for this exchange influx. The destination of these coins was also to a single exchange: Binance. The diagram below shows this movement.
The entities involved in today's miner exchange inflow | Source: CryptoQuant
Usually, deposits like these are a sign of increased selling pressure from the miners and can thus lead to a decline in the price of the asset, at least in the short term.
In this case, if these additions were indeed made with selling in mind, it would mean that miners possibly believe that the rally is winding down for now as the asset’s price has taken a hit over the past 24 hours, so they are striking while the opportunity for profit-taking is partly still there.
However, data from the Bitcoin mining reserve shows an interesting picture.
The value of the metric seems to have been moving sideways in the last couple of weeks | Source: CryptoQuant
The chart shows that the Bitcoin mining reserve saw a sharp rise just before the plunge due to today’s transfer to Binance. Curiously, this increase in reserve was just enough to cancel out the movement of the stock market.
This means that while there may have been a large withdrawal from the reserve today, the miner’s reserve has only moved sideways since the miners only withdrew what was newly deposited into the wallet.
BTC price
At the time of writing, Bitcoin is trading around $26,900, up 4% in the last week.
BTC has gone down over the last day | Source: BTCUSD on TradingView
Featured image from Brian Wangenheim at Unsplash.com, Charts from TradingView.com, CryptoQuant.com
