On-chain data shows that the Bitcoin miner reserve has shown a sharp increase recently, suggesting that miners are currently loading on the crypto.
Bitcoin Miner Reserve Skyrockets; The trend of accumulation from last year continues
As one analyst pointed out in a CryptoQuant post, the BTC miner reserve has shown a strong bullish trend lately. This appears to be a continuation of the accumulation trend from last year.
The “miner reserve” is an indicator that tells us the total amount of bitcoin currently stored in miners’ wallets.
When the trend in the metric is up, it means miners’ inventories are growing as they stock up on more coins. Such a trend can be bullish for the coin’s price as it shows miners are currently accumulating BTC.
On the other hand, a downward trend in the indicator suggests that miners have started dumping their bitcoin. This type of trend is obviously bearish for the price of the crypto, as miners typically sell in bulk.
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Now here is a chart showing the trend of the BTC miner reserve over the past few years:
Looks like the value of the indicator has showed sharp uptrend recently | Source: CryptoQuant
As you can see in the chart above, the miner reserve has been gradually moving up since May. A few days ago, when Bitcoin’s price fell to $39,000, the metric showed a huge surge as miners bought the drop.
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Miners have traditionally been big sellers in the market as they had to sell part of their mines to keep their operations running. However, as the price of BTC has increased and their machines have become more advanced and efficient, miners have started selling less as this is enough to cover electricity and other mining costs.
Miners, who originally always put selling pressure on the market, have been turning towards hodlers for a few years. This can be quite bullish for the coin’s price in the long run.
At the time of writing, Bitcoin’s price is hovering around $42,000, down 0.6% over the past seven days. Over the past month, the crypto has lost 10% in value.
The chart below shows the evolution of the BTC price over the past few days.
BTC's price plunges down after breaking above $44k | Source: BTCUSD on TradingView
BTC managed to reach as high as $44.4K on its recent move higher, but today the crypto has bounced back, erasing the gains of the past few days.
Featured image from Unsplash.com, charts from TraadingView.com, CryptoQuant.com