Bitcoin miners have historically offloaded their newly mined coins during each halving event. Now that another halving is approaching, we’re wondering if miner behavior will be the same this time around.
Next Bitcoin Halving Is Less Than Two Days Away Now
An analyst at CryptoQuant examined how Bitcoin miners acted prior to the upcoming Halving event in a recent brief post.
On Bitcoin’s digital platform, the “Halving” refers to a recurring occasion. During this time, the rewards given to miners for creating new blocks are decreased by half forever.
Approximately every four years, this event takes place. As per NiceHash’s calculation, the upcoming event is expected to happen in about 32 hours and twenty minutes.
Bitcoins miners derive income through two channels: transaction fees and block rewards. Traditionally, transaction fees on the Bitcoin network have been relatively small, making it essential for miners to mainly rely on block rewards to cover their expenses.
During a Halving, the reward for mining a new block gets reduced by half. Consequently, this leads to a substantial decrease in income for miners. It’s no wonder then, that miners have historically responded to these events in various ways.
A quant notes that during each Bitcoin supply reduction cycle, miners often apply substantial selling pressure. To assess the intensity of this selling pressure, you can examine the Miner’s Outflow figure.
The quantity of Bitcoin transferred from miners’ wallets to those linked to central exchanges is monitored by this metric. Since miners typically sell their Bitcoins through these platforms, analyzing this transfer activity can offer insights into their selling tendencies.
Here’s a chart displaying the development of the 30-day moving average (MA) for Bitcoin miner to exchange flows over the past few years.
The graph above shows that the 30-day moving average of Bitcoin miners selling to exchanges reached significant peaks during the 2020 Bitcoin halving, suggesting these sellers may have contributed to the price drop.
Miners might have decided to sell due to the impending significant revenue decrease, as suggested by the selling pressure we saw in the past. However, contrary to expectations, the graph indicates that there hasn’t been any noticeable selling pressure during this instance, despite the event being on the horizon.
Have we got a situation here? The analyst proposes that Bitcoin miners might have sold off their coins during the latest round earlier than expected, as indicated by a surge in exchange inflows in February. If this is accurate, it could potentially bring positive consequences for the market in the near future.
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2024-04-19 10:15