Here’s how Bitcoin miners load the price of BTC: Bitfinex

Analysts at crypto exchange Bitfinex attributed the decline in BTC prices to Bitcoin miners taking advantage of the asset's recent rally.

According to the latest version of Bitfinex Alpha, BTC miners' reserves have dropped significantly in preparation for the upcoming Bitcoin Halving event, seeking to provide capital and improve infrastructure.

Miners on a Sales Spree

Bitfinex said miners used BTC's run to $49,000 as an incentive to exit or exercise their positions as they approved US spot bitcoin exchange-traded funds (ETFs). This was seen in miner's BTC stock drop shortly after the Securities and Exchange Commission (SEC) announcement of the ETF.

As BTC hovered around $42,800, the Bitcoin Miner Reserve, a measure that reflects the amount of BTC in wallets linked to miners, fell to its lowest level since June 2021. Because the metric represents the portion of the Bitcoin supply that miners avoid selling, the decline suggests that they are either offloading their assets or using them to raise capital.

On-chain data shows that miners exchanged more than $1 billion worth of BTC on January 12, the second trading day for the new Bitcoin ETFs, representing a six-year high. Mining wallets also recorded an outward movement of 13,500 BTC on February 1, marking the largest negative flow since the creation of the Bitcoin mining reserve.

With the Bitcoin halving event expected to take place next April 2024, which means that Bitcoin miners will receive 50 percent less revenue for each block they produce, miners are apparently selling their BTC holdings to make more purchases. Efficient mining,” said Bitfinex.

Long-term owners remain steadfast.

As Bitcoin miners sell their holdings to fund operating costs, most long-term holders remain firm and steadfast in their positions, unwilling to unload their holdings at current market prices.

“This trend of holding, especially by long-term investors, reflects the continued confidence in the future appreciation of Bitcoin,” the crypto exchange explained.

However, Bitfinex analysts have noticed a slight increase in the costs of older BTC, especially among holders in the one- to two-year-old category. He said the exchange was ahead of such historic market highs.