Bitcoin exhibits resilience as it rebounds from a substantial dip to nearly $100,000, amidst a backdrop of increased miner activity and market turbulence. This dip was a result of public tensions between Donald Trump and Elon Musk. Currently, Bitcoin is back up and trading at $104,891, showcasing a steady recovery from the 24-hour slump.
As the wider crypto market grapples with the aftermath, fresh data suggests that an additional factor, namely miner activity, is beginning to influence the near-term outlook.
There has been a significant surge in miner inflows, which could pressure Bitcoin’s price action, according to on-chain analytics by CryptoQuant contributor, CryptoOnchain. Between May 19th and May 28th, the inflow of BTC from miners to exchanges exceeded $1 billion per day, a level unheard of in prior market cycles. These inflows often indicate miners’ intent to sell, altering short-term supply dynamics and potentially inserting more volatility into Bitcoin’s spot market performance.
The current increase in inflows from miners to exchanges suggests an increase in sell-side pressure. Miners, as key liquidity providers in the Bitcoin ecosystem, typically transfer large amounts to exchanges when they intend to sell off BTC. Historically, spikes in miner outflows have been followed by periods of downward price pressure, especially under fragile market conditions.
However, amidst the rising sell pressure, another indicator, Bitcoin’s Hash Ribbons, is signaling a potential opportunity. This indicator, which compares 30-day and 60-day moving averages of network hashrate, has recently flashed a new buy signal. It indicates that miners have come out of a capitulation phase and are now stabilizing or recovering, usually suggesting favorable long-term entry points.
While the immediate effects of mining stress could contribute to price weakness, these periods often lay the groundwork for more prolonged rallies. Once miner capitulation resolves, it can eliminate excess supply from the market and create stronger support levels.
