Recent data indicates that Bitcoin (BTC) miners have started to transfer their holdings to <a href="https://en.bitcoinhaber.net/robinhood-launches-cryptocurrency-trading-app-in-europe”>cryptocurrency exchanges, signaling a potential reversal of the upward price momentum that has persisted for months. An analyst from CryptoQuant emphasized the importance of monitoring short-term miner behaviors for smart investment decisions.
Miners are the initial recipients of all new BTCs mined in the Bitcoin network and all transaction fees paid by users. Their actions largely determine whether new BTCs enter circulation or remain inactive. Historically, miners have been among the largest whales, and their substantial transfers of BTC to exchanges can create significant downward pressure on prices. The CryptoQuant community unanimously views miners moving BTC to exchanges as a bearish indicator.
The analyst referred to a recent decline in Bitcoin’s price from $27,000 to $25,500 by mid-May 2023, following a two-month rally above $30,000 fueled by bank failures in the US and excitement over the Ordinals protocol. Currently, BTC faces a similar situation, with miners transferring hundreds of millions of dollars in BTC to exchanges last week, amidst the anticipation of a spot Bitcoin ETF approval, which had pushed the price above $45,000.
This transfer reflects a pattern of profit-taking by miners during periods of price gains, similar to what was observed in May 2023. It also follows a period of high Ordinals activity, which increased transaction fees on the network, providing miners with a new primary source of revenue. As of January, miners were receiving an average bonus of 1.73 BTC per block, in addition to the standard 6.25 BTC block reward, representing a 27% bonus. By the end of the month, cumulative transaction fee revenues in Bitcoin exceeded $100 million.
In light of these developments, the cryptocurrency company Matrixport released a report suggesting that the US Securities and Exchange Commission (SEC) would reject all spot Bitcoin ETFs in January, with final approval expected in the second quarter. The company also predicted a Bitcoin price drop to $36-38,000, advising investors to purchase put options and engage in direct short selling.
Before this report, Matrixport had speculated that ETF approval could attract a capital influx into BTC and potentially drive Bitcoin’s price above $50,000 within the month.