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On-chain data shows the Bitcoin miners have continued to make large deposits to exchanges recently, a sign that could be bearish for BTC’s price.
Bitcoin Miner Exchange Netflow Has Been Seeing Positive Spikes
In a new post on X, CryptoQuant author IT Tech has discussed about the latest trend in the Bitcoin Miner to Exchange Flow vs. Exchange To Miner Flow metric. This indicator measures, as its name suggests, the netflow happening between miner-associated wallets and centralized exchanges.
When the value of this metric is positive, it means the miners are depositing a net number of tokens to these platforms. Generally, these chain validators transfer to the exchanges whenever they want to sell, so this kind of trend can have a bearish impact on the asset’s price.
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On the other hand, the indicator having a negative value implies the the miner exchange outflows are outweighing the miner exchange inflows. Such a trend suggests this cohort may be accumulating, which can naturally be bullish for BTC.
Now, here is the chart that shows the trend in the Bitcoin Miner to Exchange Flow vs. Exchange To Miner Flow over the last year:
As displayed in the above graph, the indicator has been registering significant positive values since the bull rally from the last couple of months of 2024, implying miners have been depositing big to these platforms.
The metric has also been flagging some net outflows during this period, but the scale of them has been significantly lesser compared to the net inflows. Given that the deposits started when the rally began, it would appear likely that the motivation behind them was for profit-taking purposes.
Recently, though, bullish momentum has seen a cooldown and BTC’s price has declined, but the miner inflows have nonetheless continued. It’s possible that this group is now just panic selling, in fear of a bear market.
Miners are entities that regularly participate in distribution, due to the fact that they have constant running costs in the form of electricity bills that they have to pay off somehow. Usually, this selling isn’t of a scale that can’t be absorbed by the market, so Bitcoin doesn’t tend to be affected much by it.
In the periods where miner selling is significant, however, BTC can indeed suffer from a bearish setback. Compared to during the rally last year, miner inflows are currently lower, but are of a notable level nonetheless. “If miner selling accelerates, it could introduce short-term volatility into the market,” notes the analyst.
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It now remains to be seen what the Bitcoin miners would do next and whether their potential selling would have any influence on the asset or not.
BTC Price
At the time of writing, Bitcoin is floating around $83,400, up almost 6% in the last seven days.
Featured image from Dall-E, CryptoQuant.com, chart from TradingView.com
