2023-6-21 01:30 |
On-chain data shows that Bitcoin miners have been depositing large amounts to exchanges. Here’s what this could mean for the asset’s price.
Bitcoin Miners Have Been Depositing Big To Exchanges RecentlyAn analyst in a CryptoQuant post pointed out that BTC miners have been transferring coins out of their wallets recently. The relevant indicator here is the “miner outflow,” which measures the total amount of Bitcoin miners withdraw from their combined supply.
The counterpart metric, the “miner inflow,” naturally keeps track of the reverse flow of coins. Here is a chart that shows the trend in both the Bitcoin miner outflow and the inflow over the past few days:
The above graph shows that the Bitcoin miner outflow has observed a spike during the past day, while the inflow has remained relatively low. This would imply that the miners have transferred a net amount of coins from their wallets in this period.
Generally, whenever miners withdraw coins from their wallets, there is always a risk that they are doing so to sell said coins. Such selling can naturally have a bearish effect on the cryptocurrency’s value.
One way to better guess the intent behind these withdrawals is by checking whether the destination of the coins is a centralized exchange platform.
The chart also shows the data for the Bitcoin miner to exchange flow. This indicator specifically keeps track of the coins flowing from these chain validators’ holdings to exchange wallets.
This indicator has also seen a sharp spike at the same time as the miner outflow surge. The magnitude of both spikes is also pretty much the same; both are slightly above 1,000 BTC. Thus, almost all the outflows from the past day appear to have headed toward exchanges.
Knowing that there have been deposits to exchanges only tells us a part of the story, however, as the indicator used here doesn’t specify which type of platforms the inflows have been towards.
A modified version of the indicator, which only tracks deposits to derivative exchanges, reveals that the transfers have been almost entirely toward the derivative platforms.
When miners plan to sell their coins, they make deposits to spot exchanges. Since they have sent their Bitcoin to derivative platforms instead this time, it would seem likely that the intent behind their transfers may not have been selling after all.
As for what effect this might have on the market; usually more derivative positions being opened usually results in higher price volatility. However, this volatility can go either bullish or bearish, depending on the wider sentiment.
BTC PriceAt the time of writing, Bitcoin is trading around $27,400, up 6% in the last week.
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