On-chain data shows that bitcoin miners have recently deposited large amounts on derivatives exchanges, an indication that these network validators may be hedging against a potential future downgrade.
Bitcoin miners are shifting to derivatives exchanges lately
As reported by an analyst in a Cryptoquant post, around 4.3k BTC has run out of miner reserves during the past two weeks.
The “miner reserve” is an indicator that measures the total amount of bitcoins currently stored in the wallets of all miners.
When the value of this metric increases, it means that miners are currently moving coins to their wallets. Such a trend could, in the long run, be a sign of accumulation from miners, and therefore bullish for the price of the crypto.
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On the other hand, a lowering of the indicator means that miners are withdrawing their coins right now. Depending on where they are moving, this could be either neutral or bearish for the BTC price.
Now, here is a chart that shows the trend in bitcoin miner reserves over the past few weeks:
Looks like the value of the metric has been going down recently | Source: CryptoQuant
As you can see in the graph above, the value of bitcoin miner reserves has decreased over the past few weeks.
These withdrawals from the miner wallet amounted to around 4.3k BTC in total. The chart also contains data for two more indicators, the second of which (the graph below) just shows netflow, a measure of the net momentum around the miner’s wallet (which naturally equates to a decrease in reserves for the period). Will happen) )
In the middle graph are the curves of their flows for derivatives exchanges and spot exchanges for miner flows. It seems that the majority of transfers during this period were not spot, but derivatives.
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This may suggest that miners withdraw these coins, not sell them, against any possible drop in the price of bitcoin.
If this is indeed the intention of the miners, then the latest reduction in their reserves may not be bearish for the coin’s value.
At the time of writing, bitcoin price is floating around $21.7k, up 13% over the past seven days. In the past month, the crypto has lost 28% in value.
Below is a chart showing the coin’s price trend over the past five days.
The value of the crypto seems to have observed some upwards movement over the last couple of days | Source: BTCUSD on TradingView
Featured image from Kanchanara on Unsplash.com, charts from TradingView.com, CryptoQuant.com