When the Bitcoin price rises, a lot of people look at miners and how they are behaving. Not just in terms of hashpower, but also their outflow. As it turns out, miners are not selling more BTC despite the higher price.
The Current Bitcoin Miner Outflow
It is evident that miners play a crucial role in the Bitcoin ecosystem. They help secure the network and process transactions. Additionally, their outflow behavior often helps determine if a bullish market is likely to continue. Carefully analyzing how much BTC they are selling at any given moment offers valuable insights.
Looking at the chart below, it seems there is nothing to be worried about. The Bitcoin miner outflow has not increased in a permanent manner ever since Bitcoin’s price started trending higher. Somewhat unusual, as miners often have to pay their fixed costs, such as electricity, by selling BTC. A higher price allows them to sell less of their overall revenue generated, which is what is happening right now.
Keeping in mind there are only so many Bitcoin to be produced every day, the outflow will automatically be lower after each halving. Even so, miners can stockpile their earnings and sell it off in bigger chunks if the need arises. That doesn’t appear to be happening either, which is a rather bullish sign.
To put this into numbers, the average miner outflow sits between 1,120 and 1,170 BTC per day. That isn’t a lot of money, compared to the days where 6,000 or 8,000 BTC would be the norm. A higher price clearly doesn’t trigger a change in outflows, which is worth keeping an eye on.
The Miners’ Position Index
Another crucial metric to keep tabs on is the miners’ position index, or MPI. it depicts the ratio of BTC leaving miners’ wallets to its one-year moving average. If this number rises above 2, miners are selling in large quantities. While this number has risen above that threshold multiple times this year, it has also gone negative several times.
Currently, the MPI sits at 0.1187, but has recently hit 1.15. That is still more than acceptable, all things considered. It is further validation that miners’ outflow is well within the realm of normal behavior. More importantly, it is clearly not influenced by the recent price surge, at least not in a negative manner.
The current MPI is very different to a week and a half ago. On November 2 a lot of Bitcoin miners were selling Bitcoin, as the MP rose above 5. That is not entirely abnormal behavior either, especially in this time of year. How things will look in a few weeks from now, may prove to be an entirely different story.
Luke has had a long interest in financial technology, especially cryptocurrency and blockchain. With a Bachelors degree in Journalism and Media, Luke is dedicating his writing skills for the digital currency sphere.He can be contacted at email@example.com