- Bitcoin miners sold 4,411 BTC in May as compared to 1,115 in April.
- Will Clemente of Blockware Intelligence has identified that Bitcoin miners are going offline as energy costs pressure margins.
- Veteran Bitcoin analyst, Will Woo, has pointed out that the typical signs of a BTC bottom are yet to show.
The current Bitcoin and crypto bear market has led BTC miners to offload their holdings of the number one digital asset.
According to a Tweet by the team at WuBlockchain that can be found below, public Bitcoin miners sold a net total of 4,411 BTC in May this year which was considerably more than 1,115 BTC sold in the previous month.
NYDIG: Bitcoin miners are starting to sell their accumulated balances. Public miners sold a net 4,411 bitcoins in May 2022, considerably more than the previous average of 1,115 bitcoins per month earlier in 2022. pic.twitter.com/es74yWLqKs
— Wu Blockchain (@WuBlockchain) June 18, 2022
Bitcoin Miners Could Continue to Sell if Prices Stay Low
The team at WuBlockchain was quoting another report from NYDIG that cautioned that the selling by miners could accelerate if the BTC prices stayed low. The report stated:
If prices continue to stay low, we may continue to see more bitcoin issuance circulated into the market. As of the end of May, those same miners held about 46,594 bitcoins according to public filings, or about $1.5B at prevailing prices at the time.
In a similar analysis, Will Clemente, the Lead Insights Analyst at Blockware Intelligence, identified that Bitcoin mining machines were being unplugged due to higher energy costs that have put serious pressure on miners’ profit margins.
He also added that a lower Bitcoin price coupled with higher difficulty in mining could cause miners to start sending their BTC to exchanges for selling. Mr. Clemente shared his insights on the current state of selling by Bitcoin miners through the following tweet.
Lower Bitcoin price, higher hash/difficulty, and higher energy costs have put serious pressure on miners margins. Hashprice is now its lowest since October 2020.
Hash ribbons have crossed (bot. left), indicating machines unplugging + Miners sending BTC to exchanges. (bot. right) pic.twitter.com/x7J7pYTZ9W
— Will Clemente (@WClementeIII) June 18, 2022
Signs of A Bitcoin Bottom Are Yet to Show.
In another analysis, Veteran Bitcoin analyst, Willy Woo, highlighted that BTC’s hash ribbons hint toward a scenario of miner collapse.
According to Mr. Woo, Bitcoin bottoms typically coincide with miners capitulating as weak miners become bankrupt, adding to selling pressure that causes a cascade of selling. His analysis of the hash ribbon situation can be found in the following tweet.
Hash ribbons visualise miner collapse.
Bottoms normally coincide with miners capitulating. Weak miners are bankrupted adding to sell pressure in a cascade. Ribbon then recovers (green circles = bottom).
Looks like we’re deleveraging RN, similar to COVID event (red circles). pic.twitter.com/jjl2F8VNrt
— Willy Woo (@woonomic) June 17, 2022
Furthermore, Mr. Woo cautioned that the typical signs of a Bitcoin bottom are yet to show and that there is no guarantee that we will get them since the ongoing market drawdown is happening in tandem with a similar sell-off in the macro markets: a scenario that is different from past Bitcoin bear markets. He explained:
If we’re expecting a normal BTC macro bottom, we haven’t seen this come to pass yet.
The typical signs of a bottom are not yet in. Though there are no guarantees we’ll get them because both BTC and macro markets are structurally very different than prior history.