For two months, Bitcoin miners exhibited a negative balance with higher sales volume. This new behavior could raise the price of the pioneering cryptocurrency as the supply would decrease.
Right now, Bitcoin (BTC) miners are holding more coins than they are selling in the markets. According to Glassnode metrics, after two months of spending, the miners of the main cryptocurrency are returning to saving their rewards.
Between December 28th, 2020 and February 25th, 2021, Bitcoin miners exhibited a negative balance. In other words, the volume of their coin sales was greater than the amount that they kept in their possession.
In January, their daily sales were higher, with caps almost reaching 24,000 BTC. However, the trend started to decline in February, with a sales cap of 6,100 BTC on the 5th.
According to Glassnode, there was a positive balance in miners’ addresses, reaching 1,368 BTC. That happened after two months of sales on February 26th, but the balance remained favorable a day later, with a saving of 658 BTC.
Incidence of Bitcoin Savings on the Increase of Its Price
If miners’ saving trend remains or increases, the price of Bitcoin could increase further. That is because the supply of Bitcoin in the markets would decrease, thus increasing its scarcity.
The high demand among institutional investors would signal the lower availability of Bitcoin in the markets. Firms like Tesla, MicroStrategy, Square, and mutual fund Grayscale mutual are acquiring increasingly large amounts of Bitcoin.
In 2020, the third Bitcoin halving occurred, which reduced the issuance of new coins by 50%. The network issued incentives of 12.5 BTC for each block mined through mid-May. However, the figure is now only 6.25 BTC, that is, the reward underwent a reduction by half.
Miners made their sales while the price of Bitcoin was booming. During that period, the price of the cryptocurrency jumped from around USD 27,000 to an all-time high of USD 58,640, according to data from CoinGecko. Bitcoin reached the highest price in its history on February 21st.
Opinions on Miners’ Saving of Bitcoin
Social media users gave their opinion on the behavior of Bitcoin miners. Analyst Lex Moskovski believes that the savings could indicate an upcoming bullish trend in the cryptocurrency market. “Miners stopped selling and started hoarding Bitcoin again, which is a bullish sign,” Moskovski noted on Twitter.
Similarly, user @OMatthew explained that this is a usual move in cryptocurrency markets. Regarding the supply of and the demand for Bitcoin, he highlighted that “miners do not have an infinite supply. They hoard for a time and then dispose of their coins when they consider it appropriate to do so.”
He added that “this is probably as simple as sellers’ reducing their supply during this correction phase. Therefore, the selling pressure is diminishing and the bullish movement is approaching.”
In 2020 and so far in 2021, Bitcoin has had its highest levels of volatility. The cryptocurrency went from less than USD 5,000 per unit to almost USD 30,000. Regarding price fluctuations and the role of miners in them, there is little evidence that the latter is responsible.
By Alexander Salazar
