Bitcoin miners’ exchange flow reaches 7-month high as BTC price tanks below $21K

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Bitcoin (BTC) price fell to a 52-week low of $20,800 on Wednesday, down more than 70% from its all-time high of $68,788. While the price has recovered above $21,000, key market indicators are indicating that bears are holding a significant amount in the current market.

Bitcoin miners to exchange flow, a metric that indicates the amount of BTC sent by miners to crypto exchanges, reached a seven-month high of 9,476. An increase in exchange flows indicates that miners are currently selling their BTC in anticipation of a drop in the price.

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The actions of BTC miners often reflect larger market sentiment as they sell most of the BTC to ensure that they do not lose out on their mining rewards. The increase in sales activity for bitcoin miners is supported by a significant drop in mining profitability.

related: Largest bitcoin exchange inflows since 2018 put potential $20K bottom at risk

Mining profitability is down more than 75% from the top, and bitcoin’s hashrate is currently at $0.0950/TH/day, the lowest point since October 2020.

Bitcoin hashprice index one year chart. Source: Hashrate Index

The net flow of miners to the exchanges has also turned positive. When miner netflow is positive, it indicates that more coins are being sent to exchanges than are being sent to individual wallets. Such behavior indicates that miners are bearish on price and under selling pressure.

Many BTC mining rigs have turned unprofitable as the price dropped below $21,000 and risked off if the price did not recover. The rest of the cryptocurrency market followed BTC in its price action as the total market cap fell below $1 trillion.

Over the past decade, BTC has seen several bull cycles, followed by a 80%-90% drop from the top, however, the price of BTC has never dropped below the all-time high of the previous cycle. Currently, BTC is trading near its 2017 high of $19,783, and any potential selloff from here could propel it into the 2017 zone.