On Wednesday afternoon, the Bitcoin price suddenly fell sharply. It immediately led to a lot of liquidations, and at the time of writing, the price was far from recovering. It's rarely possible to say with certainty what causes such a crash, but… on chain In any case, the data gives us clear indications. Miners have been sending large amounts of Bitcoin to crypto exchanges.
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Is Bitcoin price crashing because of miners?
On the blockchain analysis platform CryptoQuant, analyst SignalQuant writes that miners have actually transferred a large number of coins to exchanges since the end of December. Even the 7 day version moving average shows a clear peak. We haven't seen the height of this peak since last May. The moves were also accompanied by a crash, so it could very well happen again now.
The trend towards mining volume reserves is increasing
“We need to keep an eye on whether this increase in mining reserves is temporary or permanent for meaningful investment.”
from @Signal_QuantLink 👇
— CryptoQuant.com (@cryptoquant_com) January 2, 2024
It is worth highlighting that the peak was higher in May and the subsequent crash was only 13%. That's not so bad for an asset like Bitcoin, and the price has increased by around 80% since then. Miner transactions do not always have to lead to large crashes of, for example, 50%.
But the timing is remarkable. The price has fallen by about 9% since the peak on Wednesday morning and the recovery has not yet exceeded 5%. A few days ago we wrote that Bitcoin miners were suddenly selling their coins on a large scale. Miners are influential and according to previous research smart players in the world of Bitcoin, who often actively trade their mined Bitcoins. HSo it could mean bad news for the Bitcoin price.
Bitcoin miners were optimistic
The news surrounding Bitcoin miners was very optimistic last month. For example, miners have just made huge investments in expanding their production capacity in the run-up to the Bitcoin halving, which is scheduled to take place in April. Also found Bitcoins Hashrate a new record for Christmas – the xth this year. It remains to be seen whether the optimism will continue.
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