Bitcoin sales by miners have dropped significantly recently and will no longer exert significant pressure on the market. This conclusion was reached by experts of the analytical platform Glassnode, who studied what was happening in the niche and shared their findings.
The research findings from the company’s recent report refute the notion that miners have to sell large amounts of BTC in order to migrate their capacities outside China due to pressure from the local government.
By tradition, let’s start with an explanation. Bitcoin miners are an important factor for the behavior of the cryptocurrency rate. This is due to the fact that they mine large volumes of coins and can influence what happens to the price of BTC. In addition, they do not buy cryptocurrency, which means they can either create pressure on the market from sellers, or hold coins in anticipation of price increases.
We checked the actual data: over the last 24 hours, Bitcoin miners earned the equivalent of $ 20.49 million. The record was recorded on May 10, 2021. It amounted to the equivalent of $ 67.34 million.
At the same time, it is not difficult to assess the behavior of miners due to the openness of the blockchain. In addition, the addresses of large mining pools are known, which also makes it possible to track the activity of cryptocurrency miners.
What will happen to the Bitcoin rate
With the ongoing relocation from China and the drop in hashrate, miners are indeed liquidating part of their cryptocurrency reserves to cover costs. Taking into account the current situation on the market, it is quite logical to assume that the pressure from the sellers is unlikely to weaken in the near future. But Glassnode came to the opposite conclusion.
The fact is that this week the difficulty of mining BTC will fall by almost 25 percent, which will also be the largest decline in the conversion rate in the history of the cryptocurrency. This means that profitability will increase significantly for all ASIC miners connected to the network , according to Cointelegraph . Thus, owners of computing equipment should have less incentive to sell coins, since network participants will increase profits until the missing part of the hash rate returns to work after relocation.
Recall that mining difficulty refers to how difficult it is for computing equipment to find a solution to create a block . As the number of miners on the network grows, the difficulty increases. When it falls, it decreases. This is necessary so that the blocks are created in approximately the same time, and the issue, that is, the rate of issue of a new cryptocurrency, corresponds to a predetermined rate.
For example, on the Bitcoin network, the block time is approximately 10 minutes. Although the day before, due to the massive disconnection of miners from the network, the indicator rose to a record 23.3 minutes during the day. This means that the confirmation of transactions took significantly longer than it should.
Here is a quote from analysts who share the research findings.
Since a very large portion of the hashrate is currently offline and/or in the process of being moved, the next difficulty adjustment is estimated to be minus 25 percent. The miners that stay online will probably get a lot more coins by the end of the week.
Changing the balance of bitcoins on miners’ wallets
In other words, there is no reason to panic. So far, the situation has stabilized and even turned out to be a great success for existing miners, since, provided that the cost of BTC is relatively stable, their income will increase by about a quarter. Bitcoin, meanwhile, is teetering above the $34,000-$35,000 mark, and so far there are no clear signs of a new drain wave on the market. Buyers are actively defending this line and do not let the rate sink below $30,000, experts say.
The optimism about the future of the crypto market was transferred to the star of the US National Football League, Tom Brady. The day before, he announced an investment in the FTX crypto exchange together with his wife Gisele Bundchen. Here is a quote from an athlete in which he explains his own decision.
This is an incredibly exciting time in the world of crypto, and FTX CEO Sam and his revolutionary team continue to open my eyes to limitless possibilities.
By the way, a very funny story came out with Brady himself. In early May, “laser eyes” appeared on the main photo of his Twitter profile, a meme in the cryptosphere denoting belief in the rapid growth of Bitcoin. True, immediately after that, the price of the cryptocurrency began to fall rapidly, and Brady himself admitted that his “trick” was not entirely successful.
We believe that the situation on the cryptocurrency market has become more positive in recent days. Bitcoin stopped plummeting and even reached a local high of $ 36,600, while altcoins are also holding up relatively well in price. This means that there is a possibility that conditions for further growth have developed on the market, while its local bottom is left behind. We hope to be convinced of this soon.