On-chain data shows that the selling power of bitcoin miners is at its lowest for the year, something that could be favorable for the price of the crypto.
Bitcoin Miner Selling Power Has Been Going Down in Recent Weeks
As told by an analyst at Cryptoquant PostThe metric has seen its value jump a few times this year, and each time the price of BTC has gone down.
“Minor selling power” is an indicator defined as the ratio between bitcoin miner outflows and the total number of coins held by this cohort (30-day moving average, log-scale)
Here, the “miner outflow” is a measure of the total amount of BTC that miners are transferring from their personal wallets.
When the value of a miner’s selling power goes up, it means that the ability of miners to dump their coins is just increasing as they are withdrawing more of them from their reserves. Naturally, such a trend could be bearish for the value of the crypto.
On the other hand, the lower values of the indicator suggest that miners are not exerting much selling pressure on the market at the moment, and hence could prove to be bullish for BTC price.
Now, here is a chart that shows the trend of bitcoin miner selling power (log-scale) so far in the year 2022:
Looks like the log-scaled value of the metric has been on the way down recently | Source: CryptoQuant
As you can see in the above graph, the volume marked the relevant points of the trend for the selling power of bitcoin miners.
It seems that during the past year, the indicator has seen three instances of sharp growth, and at the time of each of these surges, the price of crypto has decreased.
Over the past few weeks, the metric has been on a steady decline, indicating that miners have not sold much during this period.
As a result of this downtrend, the selling power of bitcoin miners has now reached its lowest price since last year. Going by the previous trend, this could be a positive sign for the current rally in crypto.
At the time of writing, bitcoin is priced around $20.5k, up 6% over the past week. In the past month, the value of crypto has risen by 5%.
The chart below shows the coin’s price trend over the past five days.
The value of the crypto seems to have been moving sideways between $20k and $21k | Source: BTCUSD on TradingView
Featured image from Brian Wangenheim on Unsplash.com, charts from TradingView.com, CryptoQuant.com