Miners invest heavily in derivative exchanges
Data on the chain show that Bitcoin miners have invested large sums in derivatives exchanges recently, a sign that these network validators can hedge against potential future falls.
Bitcoin Miners has transferred to derivatives exchanges recently
As pointed out by an analyst in a CryptoQuant post, around 4.3k BTC has left the mining reserves over the past two weeks.
“Miner reserve” is an indicator that measures the total amount of Bitcoin currently stored in the wallet of all miners.
As the value of this calculation increases, it means that miners are transferring coins to their wallets at the moment. Such a trend, when extended, may be a sign of accumulation from miners, and may therefore be bullish on the crypto price.
Related reading | Data indicates purchases on Coinbase behind the Bitcoin pump
On the other hand, a declining value of the indicator suggests that miners are withdrawing their coins right now. Depending on where they transfer, it may be neutral or bearish for the BTC price.
Now, here’s a chart showing the trend in Bitcoin miner reserves in recent weeks:
Looks like the value of the metric has been going down recently | Source: CryptoQuant
As you can see in the graph above, the Bitcoin mining reserve has declined in value over the last few weeks.
These withdrawals from mine wallets amounted to around 4.3k BTC in total. The chart also has data for two more indicators, of which the second (bottom graph) only shows the grid flow, which is simply a measure of the net movement around miners’ wallets (which will naturally correspond to the reduction in the reserve for this period).
The middle graph has the curves of the mine flow to derivative exchanges and their flow to spot exchanges. It seems that most transfers during the period did not go to spot, but derivatives.
Related reading | Bitcoin falls below $ 22,000, is Peter Brandt’s analysis still in play?
This may indicate that miners pulled these coins to hedge their positions against potential falls in the price of Bitcoin, and not to sell them.
If it really is the intention of the miners, the recent decline in their reserves can not be bearish for the value of the coin.
BTC price
At the time of writing, Bitcoin’s price is floating around $ 21.7k, up 13% over the last seven days. Over the past month, the crypto has lost 28% in value.
Below is a chart showing the trend in the price of the coin over the last five days.
The value of the crypto seems to have observed some upwards movement over the last couple of days | Source: BTCUSD on TradingView
Featured image from Kanchanara on Unsplash.com, charts from TradingView.com, CryptoQuant.com
