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BTC miners sell their reserves to finance their operations and make profits.
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The price of Bitcoin marked a new ATH on November 20, 2024, surpassing $94,000.
During 2024 the price of Bitcoin (BTC) has seen significant bullish momentum, largely due to the insertion of spot ETF instruments in the US that allowed for large-scale institutional money inflows.
Additionally, in April of this year the last halving of Bitcoin, an event that reduces the number of new bitcoins entering the market. If demand remains constant or increases, but new supply is reduced, the price tends to rise due to this misalignment between supply and demand.
As a result of the rise in the price of BTC, BTC miners’ reserves decrease. A drop to low levels suggests that miners could be selling a portion of their revenue to cover their operating costs and make a profit.
Recently, CriptoNoticias reported that, after a complex 2024 for the profitability of the Bitcoin Miningthe miners are in a period of higher profits so far in November, compared to previous months.
Currently, these reserves have decreased to reach at minimum levels, not seen since February 2010, according to data from TradingView.
The current reserves of Bitcoin miners are around 2 million BTC. Fountain: TradingView.
Miners’ reserves represent the amount of bitcoins they hold instead of selling immediately after mining.
If Bitcoin miners increase the sale of their reserves, they could cause an increase in circulating supply of bitcoin and, if not absorbed, put downward pressure on the price of BTC (in 2024 that supply was monopolized by institutions and retail investors).
This behavior has already occurred in the past. The following graph of CryptoQuant reveals that at the end of 2021 and during 2022 the miners’ sales (blue line) had grown and this practice coincided with a drop in the price of BTC (white line).
In 2024 miners’ reserves fell, but the price of BTC remained rising. Fountain: CryptoQuant.
However, considering the current data drawn from the chart above, it is revealed that although reserves have been steadily declining since around 2023, the value of bitcoin has been rising.
And not only that. Bitcoin hit new highs several times during the first two weeks of November 2024. At the time of this article, November 20, the coin created by Satoshi Nakamoto surpassed $94,000, marking a new all-time high (ATH).
Bitcoin price on the rise versus miners’ reserves on the decline
In principle, this situation could be explained due to the increase in demand institutional and retail, which exceeded miners’ sales. The entry of new participants into the market, especially institutions, could easily absorb the additional supply generated by miners.
On the other hand, the perception that miners’ reserves are declining may reinforce the scarcity narrative of Bitcoinattracting more buyers and pushing the price up.
As miners hold less BTC compared to the total circulating supply, its direct impact on the price decreases, while other factors, such as adoption and macroeconomics, gain prominence.
So, although in the past the sales of BTC miners have influenced the fall in the price of this asset, their influence would seem to be losing relevance in 2024.
As reported by CriptoNoticias, analysts have projected the continuity of bitcoin’s bullish cycle, which could take the main currency to a “minimum price of $285,000”.
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