Miners may soon start selling bitcoins to lock in profits, according to analyst Philip Swift.
1/ Do miners still have the power to dump the price of $BTC in a world where daily mined bitcoin is likely a lot smaller than institutional buying? Discuss.
The Puell Multiple, which looks at miner rev today vs. historical norms is approaching the overbought red band… pic.twitter.com/ZZAY9R9tdO
— Philip Swift (@PositiveCrypto) March 11, 2021
In his forecast, the expert cites the Puell Multiple indicator, created by market analyst David Puell. The indicator is calculated as the ratio of the dollar value of newly mined bitcoins to annual averages and reflects the most profitable periods for selling the first cryptocurrency.
According to Swift, historically when the indicator reaches the red zone, it coincides with price tops for Bitcoin. The current reading is at its highest level since the end of 2017.
“Puell Multiple, reflecting miners’ current earnings relative to the historical norm, is approaching an overbought level,” the expert wrote.
Institutional investors, who entered the market during the 2021 bull run, could absorb the new supply.
“Will miners be able to push down Bitcoin’s price if the number of coins mined per day is likely significantly lower than institutional purchases?” asks Swift.
In a comment under his tweet, analyst Cole Garner reminded that in the two most recent cases, miners’ sell-offs of Bitcoin coincided with price declines.
Can miners still dump price? I’ll just leave this chart here. pic.twitter.com/nIo0OK0gHN
— Cole Garner (@ColeGarnerXBT) March 11, 2021
“Judging by the chart, miners are either very effectively driving down Bitcoin’s price, or they know exactly when to sell the coins,” Garner added.
Overall, miners’ selling pressure now is far lower than in previous years, according to a Stack Funds report cited by Cointelegraph.
According to them, the seven-day outflow from mining pools is at its lowest since 2016. Back then, miner sales fell below long-term support, and 2017 saw Bitcoin’s price surge to $20,000.
Data: Stack Funds.
“За последний год падение произошло дважды: в мае 2020 года и в конце января 2021 года. Это дополнительно подтверждает, что продажи биткоинов майнерами, вероятно, останутся низкими, что может стать катализатором роста стоимости актива”, – полагают в Stack Funds.
Based on fundamental indicators, the firm’s analysts concluded that miners are accumulating Bitcoin again, and the $50,000 level should provide a reliable near-term support.
In November 2020, Coin Metrics developed a new методику количественной оценки активов, находящихся в распоряжении биткоин-майнеров. Ее особенность заключается в разделении активности майнеров и майнинг-пулов, что позволяет точнее оценивать запасы находящихся в их распоряжении добытых монет.
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