Bitcoin Miner Selling Pressure Nears Three-Year Low

Bitcoin miner selling pressure has significantly decreased, with miners' BTC inflows to Binance dropping to levels not seen since mid-2023. This change is important because miner distribution has long been a major source of structural sell-side pressure in the market. Current data indicates that this pressure has eased for the time being.

Key Takeaways

Bitcoin miner selling pressure has dropped to nearly three-year lows, with current inflows to Binance reflecting this decrease.
The decline follows a situation in early 2023 when miners faced disruptions due to severe weather, prompting increased sales to cover costs.
Despite reduced selling from miners, they still hold approximately 1.8 million BTC, which could impact market dynamics if sold.
Bitcoin is working to stabilize above certain cost basis levels, with various short-term holder cohorts showing different levels of pressure.

Bitcoin Miner Selling Pressure Drops To Near Three-Year Low

In a recent post on X, CryptoQuant contributor Darkfost reported that the monthly average of BTC inflows from miners to Binance has declined to about 4,316 BTC. When considering all exchanges, this figure rises only slightly to 4,381 BTC, indicating that the slowdown is widespread and not just limited to one exchange.

Decline in Miner Selling Pressure

This recent decline follows a brief increase earlier this year, which was linked to severe weather conditions in the United States. Darkfost noted that miner inflows surged during the ice storm that impacted the country in late January and early February. During this time, many large US-based mining pools were forced to reduce or temporarily halt their operations. Consequently, this disruption likely resulted in increased BTC sales as miners sought to cover ongoing operational costs despite a drop in output.

“It is crucial to remember that during this adverse weather event, many large US-based mining pools had to slow down or stop their operations temporarily,” Darkfost explained. “Even when activity is curtailed, fixed costs such as electricity and infrastructure remain significant. This scenario might have compelled some miners to enhance their BTC sales to maintain liquidity.”

Currently, the situation has reversed. Darkfost reported that inflows have decreased to "historically low levels," with similar miner transfer figures to Binance last noted on June 5, 2023.

Bitcoin miner to exchange flow | Source: X @Darkfost_Coc

The broader implication is clear: miners are withholding BTC from exchanges, which indicates they are selling less into the market. Darkfost highlighted this trend as a positive development, stating, “The decline in inflows suggests that miners have significantly cut back on their BTC sales, signaling a reduced structural selling pressure from this group.”

However, this does not eliminate risks entirely. Darkfost estimates that miners still possess about 1.8 million BTC in reserves, a significant stockpile that could affect the market if conditions change and selling resumes. In other words, while the current lack of intense selling is encouraging, it does not mean that a supply imbalance has completely disappeared.

Bitcoin Price Dynamics Among Holders

The data on miners coincides with signs that Bitcoin is attempting to establish a more stable foundation among short-term holders. Darkfost observed that the market has spent almost a month trying to stabilize above the breakeven level of the youngest short-term holder group, which includes holders for 1 week to 1 month. This group’s estimated breakeven point is at $68,200, making it the only short-term segment currently around breakeven.

For other holder groups, the pressure points are higher. The 1-month to 3-month cohort has an estimated cost basis of $83,500, while the 3-month to 6-month group is at an even greater $96,900. Darkfost remarked that the 1-month to 3-month level served as resistance the last time the price approached it, leading many short-term holders to exit, which pushed the broader short-term holder segment back into unrealized losses.

As of the time of reporting, Bitcoin is trading at $68,553.

Bitcoin price chart Bitcoin must break above $74,500, 1-week chart | Source: BTCUSDT on TradingView.com