Glassnode: Weaker Bitcoin miners might have sold all their digital holdings or mining rewards
It’s been almost a month since Bitcoin went through the Bitcoin halving event. Bitcoin price is nothing special. And this anomaly was pointed out by analysis firm Glassnode that Bitcoin miners might have sold all their digital holdings.
When are miners moving large amounts of #Bitcoin?
The Miner Outflow Multiple shows when the volume of $BTC flowing out of miner wallets is high compared to its historical average.
It is the ratio of miner outflow (in USD) and its 365 day MA.
Now live: https://t.co/HiVHCHasO6 pic.twitter.com/FNdrEAat1I
— glassnode (@glassnode) June 5, 2020
Major Bitcoin miners stopped selling coins
Glassnode’s Miner Outflow Multiple (MOM) for BTC shows that the amount of BTC that leaves miner pools is approaching its new one-year-low, based on its 365-day moving average. In particular, Bitcoin miners who are not suited for the new, complex age of Bitcoin mining are likely to sell the last of their rewards. Meanwhile, well-established players are registering to HODL, instead.
MOM is a ratio that is calculated by how much of all BTC leaves the mining pools, against the 365-day moving average for such outflows. At the beginning of the weekend, the figure was pegged at 0.33, which is a 70% drop from 1.02, where it sat only a day before, on June 5. Meanwhile, the highest value this year on March 10, just two days before the Bitcoin price collapsed. Previously, this number was 1.8.
Is the operator’s behavior a sign of price increases?
While some believe the figures show price drops, the founder of Adamant Capital, a Bitcoin-focused investment firm, Tuur Demeester, thinks this is a bullish sign.
Healthy bitcoin miners are hodling, and struggling miners have little BTC left to sell. Bullish. https://t.co/MFjaILwLlL
— Tuur Demeester (@TuurDemeester) June 5, 2020
On the other hand, Glassnode data shows that mining activities are decreasing. The decline began in late May, and it has continued since then. The figures also show that BTC sales are almost in line with miners’ income right after the halving takes place. However, previous data also showed that BTC miners’ revenue dropped 60% during this period.
Some believe that miners are simply hodling because the current market conditions are inadequate. However, more established miners are taking the opposite approach and are selecting to hold on to their BTC. Renewed that they are increasing their BTC stash every week.
Bitcoin now trading cautiously ahead of Fed monthly two-day meeting
Although Bitcoin’s price plunged over the weekend, BTC closed the seven-day period with a green candle higher than 3.21%, marking its second weekly increase in a row after collapsing to as low as $. 8,680 last time. Technical factors, such as the near-term sound resistance of nearly $ 10,000 and equally strong support above $ 8,500, helped the Bitcoin trend in the range.
Bitcoin trending inside a tight weekly range | Source: TradingView.com, Coinbase
However, Bitcoin which is heading into a week will see the Federal Reserve shed more light on economic reality. The central bank will conduct a two-day monthly meeting on Tuesday and Wednesday. The outcome of the meeting will determine the next direction of the Bitcoin price.
The Fed meeting is important because it allows investors to plan transactions according to economic forecasts. If the central bank sees a slowdown ahead, it could push people into the safety of safe-haven assets, mostly cash. Meanwhile, if they grow slowly but still resolutely support the market with the stimulus program, it may increase the demand for risky assets.
Investors choose cryptocurrencies to manage their portfolio risk. Therefore, if the Fed continues to keep interest rates close to zero and buy endless bonds, it could increase Bitcoin’s appeal to an overblown stock market.
SPX performance since March 2020 sell-off | Source: TradingView.com
The Fed may clear more of this suspicion on Wednesday. If the economic recovery is significant and continues to receive support from lower interest rates and fiscal stimulus, the S&P 500 may continue to rise higher. In return, Bitcoin could spike based on the same catalysts. That means a clear breakout above the $ 10,000 resistance level. It will take many traders longer on cryptocurrencies, especially after a general consensus showed it reached $ 20,000 later this year.
- Bitcoin Now Approaching The Apex Of A Crucial Triangle Pattern That Has Contained Bitcoin Price Action For The Past Few Months
- CryptoCompare: Cryptocurrency Derivatives Across All Platforms Soared In May, Increased 32% To ATH At $602 Billion