Bitcoin miners are accumulating coins for the first time since December 2020, thus reducing the downward pressure on the market, according to data from the blockchain.
Glassnode’s Miner Position Index (MPI), which reflects changes in wallet balances over 30 days, has recently returned to positive values. Over the past two weeks, the number of bitcoins in miners’ wallets has increased by 4,435 to 1.806 million BTC.
“Miners have switched to accumulating liquid assets, because they have enough cash reserves to support their activities, which they gained during the rise of bitcoin from $ 20,000 to $ 40,000, or most of them are holding in anticipation of a rise in the rate ,” he said in a conversation with CoinDesk Flex Young, CEO of Hong Kong-based Babel Finance.
Miners receive income in cryptocurrency, but they pay with service providers in traditional currency, so they are forced to liquidate some of the mined coins. The volume of liquidation depends on their current operating conditions and expectations in the context of Bitcoin price behavior.
The resumption of the accumulation of mined coins has been observed since March 31, while for four months before that, miners were reducing their positions and fixing profits. The largest volumes of cryptocurrency – from 17,000 to 24,000 BTC per day – were sold by them in January.
Glassnode says that although the share of miner sales in the total trading volume of the cryptocurrency market is small, their behavior reflects the expectations of its largest players. At the same time, «whales» also stopped selling, and their number has been stable above 2,000 since March 31st. Before that, the value dropped from 2,230 to 2,004 in two months.
It should be borne in mind that this model of behavior has a downside – large players can avoid selling when they know that the market is unable to absorb additional supply without a significant depreciation.
As a result of the transition of miners to the accumulation strategy, on the morning of April 10, the bitcoin price continued to grow and again crossed the $ 60,000 mark.