On-chain data shows Bitcoin miner reserve has showed a sharp spike recently, suggesting that miners are currently loading up on the crypto.
Bitcoin Miner Reserve Shoots Up; Trend Of Accumulation From Last Year Continues
When the trend in the metric is towards up, it means miner inventories are growing as they stock up on more of the coin. Such a trend can be bullish for the price of the coin as it shows miners are currently accumulating BTC.
On the other hand, a downtrend in the indicator implies miners have started to dump their Bitcoin. This kind of trend is naturally bearish for the price of the crypto as miners usually sell in big amounts.
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Now, here is a chart that shows the trend in the BTC miner reserve over the past couple of years:
Looks like the value of the indicator has showed sharp uptrend recently | Source: CryptoQuant
As you can see in the above graph, the miner reserve has been gradually moving up since May. A few days back, when the price of Bitcoin dropped down to $39k, the metric showed a huge spike up as miners bought the dip.
Miners have traditionally been big sellers in the market as they have had to sell some of what they mine to keep their operations running. However, as BTC’s price has risen, and their machines have gotten more advanced and efficient, miners have started selling lesser as it’s enough to sustain electricity and other mining costs.
Miners, who have originally always brought selling pressure to the market, have been shifting towards becoming hodlers for a coupe of years now. This can be quite bullish for the price of the coin in the long term.
At the time of writing, Bitcoin’s price floats around $42k, down 0.6% in the last seven days. Over the past month, the crypto has lost 10% in value.
The below chart shows the trend in the price of BTC over the last few days.
BTC's price plunges down after breaking above $44k | Source: BTCUSD on TradingView
BTC managed to reach as high as $44.4k in its recent move up, but today the crypto has once again come back down, erasing the gains of the past couple of days.
Featured image from Unsplash.com, charts from TraadingView.com, CryptoQuant.com