What does it indicate when bitcoin miners sell during the recession?
Bitcoin miners are liquidating their assets in the face of tightening budgets and sluggish growth in the cryptocurrency sector. Lark Davies, a crypto YouTuber, said that this has been occurring since the beginning of the cryptocurrency meltdown. Typically, miners keep their tokens until a dip has passed before selling them. Miners can optimise their profits in this method. But selling during a downturn shows that miners anticipate additional declines in the price of bitcoin. Davies published a Glassnode chart of the Bitcoin miner’s net change position, which represents the 30-day rate of change in the amount of bitcoins held in miner addresses but not yet spent. The most recent activity reveals a significant drop in miner distribution over the past few weeks, culminating at -8,000 BTC/mth and ranging from -5,000 BTC/mth. Since then, the figures have decreased to reflect a current net change position of -3,300 BTC/mth, indicating that the trend may turn to a more favourable distribution in the upcoming weeks. Between January 2021 and April 2021, that was the last time a negative net position change of this importance occurred. The top for this time frame was -26,000 BTC/mth.
Bitcoin experienced a significant uptrend between January 2021 and mid-April 2021, reaching a new record high of $65,000. The Relative Strength Index (RSI) indicator showed red-hot overbought levels during this time, which was characterised by joyous disbelief. When the market is strong, like it was between January and April 2021, miners typically sell Bitcoin, while they hold onto tokens when the market is down. The result will keep selling pressure on the top cryptocurrency until miners feel liquid enough to continue operating. Meanwhile, Bitcoin reversed a weekly decline that had seen nine straight weekly closing in the negative. Investors are relieved by the news even if it’s too soon to declare a bottom, especially given the macroeconomic uncertainty.