Here Is How Miners Could Be Manipulating Bitcoin Price

Miners within the Bitcoin network are rewarded in coins (BTC) for their revenue. Besides holding the BTC, miners offload their bags on exchanges to get cash, which covers rent and electricity elements. Miner exchange inflow has for a long time not been considered a significant impact on the price. However, the emergence of on-chain metrics could disapprove of that notion, hence the need to take a closer look at miners’ activity.

Understanding Bitcoin price correlation to miner activity

Bitcoin has been in a persistent bull cycle since the last quarter of 2020. Despite the consistent rally, retracements have come into the picture – for instance, early this week, BTC tumbled from $58,000 to $45,000.

According to Glassnode’s Bitcoin spent output lifespan on a 30-day trailing average, the activity of miners who have been in the industry for more than ten years have signified several local tops.

Note that the miners moved chunks of at least 1,000 BTC to exchanges since the beginning of December. The chart below indicates instances when Bitcoin price dropped after a surge in miner exchange inflow.

Bitcoin spent output

Bitcoin spent output lifespan

The miner inflow chart highlights the volume of coins transferred into miner addresses. Over the last ten years, an increase in miner inflow has led to a Bitcoin price spike. The degree of growth varies, which means that other factors must be considered when using this metric to predict BTC price action.

(Click on image to enlarge)

BTC miner inflow

Bitcoin miner inflow

The Bitcoin miner transfers to exchanges also seem to validate the above metrics by illustrating that a higher volume sent to exchange leads to a drop in price. For example, the fall at the beginning of January preceded a consistent increase in miner exchange inflow.

(Click on image to enlarge)

Bitcoin miner exchange inflow

Bitcoin miner exchange volume

Generally, surging exchange withdrawals lead a significant bull runs. Note that the exchange withdrawals reduce reserves on platforms, consequently leading to diminishing supply. If the demand for Bitcoin remains the same or rises, Bitcoin price rallies to a new level. These demand and supply mechanisms can be observed on the chart.

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