Miner outflow has hit a multi-year high as tens of thousands of Bitcoin (BTC) worth over $1 billion were sent to exchanges.
Data from CryptoQuant shows that the majority of Bitcoins were withdrawn by mining company F2Pool. Bradley Park, an analyst at the company, told CoinDesk in a Telegram message that the move was due to miners facing higher costs.
Miners are companies that use extensive computing resources to validate transactions and protect proof-of-work networks like Bitcoin. Most revenue is typically generated through rewards that are automatically awarded in the form of tokens by the networks that mine them.
Historically, miner outflows on exchanges can be a bearish signal for Bitcoin price as they often precede price declines. However, this is not always the case and the correlation is not clear.
For example, increases in miner outflows have sometimes led to price declines in the past, but there have also been occasions, such as in August 2019, where the price of Bitcoin continued to rise despite increased outflows.
Currently, analysts believe that the current miner outflow does not represent an overly pessimistic signal, as it comes in the shadow of the listing of the first US Bitcoin ETFs – a monumental event that has been a decade in the making.
Learn Crypto Trading, Yield Farms, Income strategies and more at CrytoAnswers
https://nov.link/cryptoanswers
Comments are closed.