At the time bitcoin (BTC) looks set to elongates its recent bullish movements, those (miners) in charge of generating new bitcoin, in the mining process, have increased their selling. The world’s largest market value crypto-currency rose from $3,867 to $7,000 in the 13-day period until March 25.
Yet, throughout the 81 percent recovery rally, miners sold more coins than they generated, according to the miner’s rolling inventory (MRI) figure, a measure created by the crypto data company ByteTree which tracks changes in inventory levels that miners held.
Over the whole duration of the recent recovery from lows below $4,000, the 21-day rolling MRI stayed above 100, which means that miners sell more than the mined coins and run down inventory, while a reading below 100 MRI indicates that miners amass inventory by selling less than mine.
Because prices kept rising, there was more than enough appetite for the bitcoin which the miners fed the market.
Mining pools account for the highest percentage of bitcoin that flows into exchanges and have considerable price influence. Yet some see the reaction from the market as a positive indicator.
BTC Price Rally a Sign of Strength in the Overall Market
“When the price of bitcoin can rally sharply from the local lows and buyers can absorb the extra bitcoin sold by the miners with little impact, it is a sign of strength in the overall market,” Connor Abendschein, crypto research analyst at Digital Assets Data said.
Also on Wednesday miners ran down inventory, as ByteTree founder and Chairman Charlie Morris noted.
“Miners sold 2,788 against 1,588 mined, slamming the market, yet the market takes it. This is bullish,” Morris tweeted during Wednesday’s European trading hours. During the Asian session, the crypto-currency dropped from $6,700 to $6,500, possibly on miner sales, but reversed losses later in the day.
However, other analysts are of the view that one-day variances in net miner sales are often too small to make a valid judgment of the market’s bullishness.
“Wednesday’s sell volume of 2,788 wasn’t statistically significant enough to have much meaning on the larger bitcoin price movements.” said Alexander S. Blum, COO at fintech company Two Prime. “Compared to the amount of Bitcoins in the world, the miner sales were less than 1 percent”.