Bitcoin Miners Have Started Selling – Indication Of A Bear Market Coming?
According to Bitcoin on-chain data, BTC miners have started selling more of their coins on exchanges, which usually is an indicator that a bear market could be ahead.
CryptoQuant posted recently that all miners to all exchanges flow mean for Bitcoin have sharply risen over the past weekend.
In order to understand the data, three basic terms are important to grasp.
First: all miners to all exchanges flow total, which shows the total number of coins sent from miners to exchanges.
Second: the transactions count flow, which indicates the number of Bitcoin transactions done from mining pools to exchanges.
Third: the flow mean that’s defined as the mean amount of Bitcoin transferred from miners to exchanges. It’s calculated by dividing the flow total with the transactions count. This indicator is of the focus here.
Bitcoin All Miners To All Exchanges Flow Mean = Flow Total ÷ Transactions Count
The chart below that shows how the value of the indicator has changed over the past year:
According to the graph above, on the weekend, the all miners to all exchanges flow mean has hit the highest point since November 2020.
The past month has also seen other smaller peaks with the average Bitcoin transferred being more than 60 BTC. The peak this Saturday was almost 100 coins big.
The mining environment right now is a slight disarray due to China’s crackdowns, and possibly the value of the indicator is going up because miners are relocating to other countries and restarting operations.
Usually, when the value of the indicator goes up, it means more miners are transferring their BTC to exchanges for selling purposes.
Due to the large quantities involved are pretty large here, selling pressure from miners can have an impact on the entire market. The value going up can be bearish for the market, but should be noted that it doesn’t necessarily have to result in the price falling down.
There have been instances in the history of Bitcoin where the miners to exchanges flow mean going up hasn’t resulted in a crash. For example, the price only continued to climb up after the November 2020 spike.
At the time of writing, BTC price is around $30.7k, down roughly 7% in the last 7 days. Bitcoin continues to be stuck in a range bound market as the crypto’s price fails to move much in the past few weeks.
The market direction is very difficult to predict, but if the miners to exchanges flow is a factor to consider, there could be a bearish turn soon. However, as mentioned before, that doesn’t necessarily have to be the case either.
