Bitcoin miners are starting to actively sell their coins, which may negatively affect the price of the main cryptocurrency.
This is evidenced by the Miner Position Index (MPI) developed by the CryptoQuant analytical platform. MPI has reached its three-year high to date. We will tell you what it means.
Note that the sale of cryptocurrency by miners is a normal situation. As we learned from the confession of the miner in March this year, many owners of computing equipment adhere to this particular strategy, since they were burned at the holding of unpopular cryptocurrencies in the past.
At the same time, it is also understandable to understand the desire of Bitcoin miners to hold on to cryptocurrency over the past few months. The growth of BTC has been very rapid, so many hope to continue the race and update the historical heights of the exchange rate. Now, an increase in the volume of sales can only indicate that miners do not yet believe in a jump in the Bitcoin exchange rate in the near future – but they still need money to pay for the rent of premises and maintenance of equipment. Therefore, they want to take profit and continue to do their job.
We checked the actual data: the last few days, the BTC rate has been showing noticeable volatility. In particular, today Bitcoin is valued at $ 17,871, which is 2.9 percent higher than a day ago. Here is a graph of the cryptocurrency rate for the last week, where quite sharp changes in the indicator are noticeable.
Bitcoin price chart for the last week
It can be assumed that the activity of sellers has already begun to affect the market.
What will happen to Bitcoin?
On December 10, two fairly large transactions were seen on the blockchain, sent from mining pools. They coincided with a sharp jump in MPI. You can see their details in the screenshot below: these are transfers in the amount of 802 BTC and 11 852 BTC, and the cost of the latter reaches $ 215.9 million at the current exchange rate.
Large transactions marked by a bot in Telegram
Miners often sell bitcoins through regular or OTC trading platforms. When a sell-off occurs on spot exchanges, it can increase short-term selling pressure on BTC, which is disadvantageous for sellers as well. When miners make most of their transactions outside of exchanges, the impact on the price of BTC is not felt as quickly as the coins are sold directly to buyers.
Read more about direct selling of cryptocurrencies or the so-called OTC trading in a separate article.
Change in MPI indicator against the background of Bitcoin price
According to CryptoQuant CEO Ki Yong Joo, the miners sold «a lot» of bitcoins on December 10th. While Key remains optimistic about the January price forecast, he explained that MPI rallies are a potentially worrying trend for the foreseeable future. Here is a quote from him, in which he shares his thoughts on what is happening. The replica is given by Cointelegraph.
The overall churn is not that big, but it is increasing compared to the past days. In addition, the number of outgoing transactions from pools is unusually high today. At the moment, the flow of miners’ coins to exchanges seems to be small, so I am sticking with my long position on Bitcoin.
Note that miners can put significant pressure on the price of the main cryptocurrency, especially if large amounts are sold collectively by several pools on exchanges. However, in the medium to long term, the accumulation of BTC by institutional investors may offset this trend. Therefore, in general, analysts agree that investors have nothing to worry about, and the current situation will in no way affect the upward trend that is observed now.
We believe that there is really nothing wrong with what is happening. The desire to take profits at a relatively high price is exactly what miners, traders and investors should strive for. Therefore, this situation does not change the general trend and does not mean that now it will change to negative. Moreover, it should become a motivation for other representatives of the cryptocurrency community, who, on emotions, can forget about profit and let the situation go by itself. Usually in the world of cryptocurrency, this ends with an unexpected drop in rates and profit taking.
