Bitcoin miners’ exchange flow reaches 7-month high as BTC price tanks below $21K

Bitcoin (BTC’s) price plunged to a 52 week low of $20800 on Wednesday. This is a drop of over 70% from its record high of $68,788. Although the price recovered to above $21,000, market indicators suggest that bears have a substantial hold on the market.

Bitcoin Miners to Exchange Flow, which measures the amount of BTC sent to crypto exchanges by miners, reached a seven-month peak of 9,476. In anticipation of the price falling, miners are selling their BTC to offset this increase in exchange flows.

BTC miners’ actions often reflect larger market sentiment. They mostly sell BTC to avoid losing their mining rewards. The significant drop in profitability in mining has fueled the rise in Bitcoin miners’ selling activity.

Related: The potential $20K bottom is at risk due to the largest Bitcoin exchange inflows of 2018.

Mining profitability has fallen by 75% since the top. Bitcoin’s hash rate currently stands at $0.0950/TH/day which is the lowest level since October 2020.

Chart of Bitcoin Hashprice Index for one year. Source: Hashrate Index

Positive has also been recorded in the miner netflow to stock exchanges. Positive miner netflow means that more coins are being sent from exchanges to the exchanges than to individual wallets. This behavior indicates that miners are hesitant to sell and bearish on the market.

Many BTC mining rigs are now unprofitable, with the price falling below $21,000. If the price does not recover, it could be shut down. As the market cap fell below $1 trillion, the rest of crypto market followed BTC’s price action.

BTC has experienced a number of bull cycles over the past decade. These bull cycles were followed by a decline of 80%-90% from the top. However, BTC’s price has never been below its all-time high of the previous cycle. BTC trades close to $19,783 as of today. Any sell-off could push it into 2017 territory.

https://cointelegraph.com/news/bitcoin-miners-exchange-flow-reaches-7-month-high-as-btc-price-tanks-below-21k