Bitcoin: Miner Net Position Change

BTC News #30

During a Bitcoin bull market there are two main sellers of coins; Miners and longer term hodlers.

Some longer term hodlers may sell to realize insane profits they have made to fund new things like buying a house.

Miners are generally consistently selling to cover costs of running their mining operation. This sell pressure changes as sentiment changes within the mining community. The thought process of a miner is a bit different because they have a business behind their Bitcoin holdings and have many things to think of regarding their Bitcoin.

During periods of consolidation, miners may liquidate more of the Bitcoin they earned to pay for costs. When price starts to look like its next leg up is coming, miners may start to ease off the selling to capture the gains. This creates less sell pressure in the market and compounds the next price move.

The best part is, we can track the net position of miners.

Using Glassnodes studio we can see the change in supply held in Bitcoin miner addresses. Green indicates they’re holding and their addresses are growing in Bitcoin supply and red means they’re selling.

You may be thinking that there is a lot of red in 2021. However there are two ways to look at this.

  1. Even with heavy miner sell pressure, the price of Bitcoin grew.

  2. The sell pressure has begin to ease off in February, showing us that miner sentiment is shifting more bullish as they’re choosing to hold more coins.

2021 is shaping up to be very interesting from a macro point of view.

Let’s connect on Twitter. Looking forward to hearing your thoughts and feedback.

In the news…

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Nothing in this article is investment advice. I’m not a financial advisor. Do not make investment decisions based on what is in this article or any other article written by BTC News or Blockedia.