An analyst said over the weekend that Bitcoin miners selling their crypto rewards and holdings en masse will not deter the next bull run, according to on-chain data that he cited.
Bitcoin Miner Sales Won’t Affect Bull Market
Ki-Young Ju, the CEO of on-chain analytics and data firm CryptoQuant, said the continued selling by Bitcoin miners will not affect a crypto bull run. This is despite recent data showing miners started selling Bitcoin at the end of July, which led to selling pressure in the crypto market.
The above then led to a sharp drop for Bitcoin and other crypto assets. And while many altcoins and DeFi tokens experienced surges of upto 50%, Bitcoin struggled to break the $12,000 mark.
Miners are one of the two biggest sellers of Bitcoin on the open market, the other being exchanges. Willy Woo, an on-chain analyst, previously shared this sentiment on a tweet, stating that Bitcoin miners dilute the supply and sell onto the market, and crypto exchanges “tax the traders and sell onto the market.”
Bitcoin miners regularly sell their rewards to make up for operating expenses. This period is usually dotted with a broader sell-off. However, while this selling pressure leads to momentary sell-offs, CryptoQuant’s Ju said miners selling off their holdings was not a big concern.
“Miner Update: Some miners began selling at the end of July, but I think in the long-run, miners didn’t sell BTC large enough to stop the next bull-run.”
As per data from ByteTree, the inventory of Bitcoin miners fell by over 125 Bitcoin per week in the last three months, with further indication that miners sold over $1.362 million per week, in Bitcoin, over and above the Bitcoin they mined and sold.
Still, their action has not caused much of a price drop. Bitcoin is still trading over the psychological level of $10,000. However, if it were to fall below, many traders and investors could start taking bearish bets on the crypto market.
Meanwhile, other on-chain metrics and analysts state the ongoing price action in Bitcoin markets is part of a “accumulation phase.” As Rafael Schultze-Kraft, the CTO at Glassnode, said:
“Short-Term Holder Net Unrealized Profit/Loss (STH-NUPL) with a #bullish signal here imo. That bounce of the 0-line was important, is very characteristic for previous bull markets, and historically a good buying opportunity.”