Bitcoin Miners Can’t Meet Up
Usually, bitcoin miners are known for holding the coins that they realize from their activities. Since miners are not buying the coins in the first place, it makes them the natural net sellers of bitcoin. However, their tendency to hold these coins has often seen them having to offload their bags onto suffering markets. So instead of actually selling in a bull, they tend to hold until the bull market is over and with profitability down in a bear market, are forced to sell coins to finance their operations.Related Reading | Bitcoin Recovery Wades Off Celsius Liquidation, But For How Long?
BTC miners selling off holdings | Source:
Implications Of A Sell-Off
It is important to note that bitcoin miners are some of the largest bitcoin whales in the space. This means that their holdings have the potential of being a major market mover when dumped at the same time. These miners hold as large as 800,000 BTC collectively with public miners accounting for just 46,000 BTC of that number.
What this means is that if bitcoin miners are pushed to the wall where it triggers a mass sell-off, the price of the digital asset would have a hard time holding up against it. The massive sell-side pressure it would create would push the price further down, likely being the event that would see it touch its eventual bottom.Declining prices forcing miners to selling BTC | Source:
The behaviors of the public miners can often help point to if a massive sell-off is imminent. These public companies only account for about 20% of all bitcoin mining hashrate but if they are forced to sell, then it is likely that private miners are being forced to sell.
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Short-term recovery on the part of bitcoin can push back this sell-off. However, it will only be a short-lived reprieve as energy costs are constant and some machines, namely the Antminer S9, have now become cash-flow negative. To survive the bear market, miners would simply have no choice but to dump some BTC to weather the storm.Featured image from Newsweek, charts from Arcane Research and TradingView.com
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