- Bitcoin plunged over 10% in the past two days
- The Miner Net Position Change recently turned from red to green
- On-chain data reflects that miners are investing more into Bitcoin
Bitcoin markets witnessed an extreme correction in the past week, which continued till the weekend. However, the data reflects miners are still purchasing.
Glassnode data suggested that miners traded hundreds of thousands of Bitcoin in the time slot from the last week of 2020 until the past week. The Miner Net Position Change refers to a tool that evaluates the 30-day transformation in the supply of the miner addresses. According to the charts, the device recently turned from red to green.
Bitcoin miners require enormously huge equipment to verify the network and resolve millions of complicated calculations within a second. They earn due rewards for the process. For mining each block, they collect bonuses in the form of Bitcoin. This further acts as an incentive for them to continue providing resources to the platform.
Thus, it’s an expensive process. The charges constituted by electricity and cooling for the mining rigs sum up to become massive amounts. This implies that miners need to trade their rewards to run their business consistently actively. This transforms into constant sell enforcement on the asset, which the other market members like retail investors or institutions purchase.
However, the past few days proved to be different. On-chain data reflects that miners invest more into Bitcoin as the asset plunged over 10% in the past two days. There was no radically negative information to justify the correction, but Bitcoin joined the scheme of global technology stocks and macro bonds.
Miners’ accumulation for Bitcoin mining
The CEO of crypto fund Moskovski Capital, Lex Moskovski, highlighted the Glassnode data through his Twitter profile and observed that miners seem to be assembling Bitcoin rather than trading off the asset en masse.
Lex added that miners are, thus, accumulating Bitcoin. Since December 27, Miners Position change showed a positive signal for the first time. He noted that the existing “positive” slots on the miner charts reflected a healthy buying chance for the miners. He explained that miners are likely to collect and assemble the asset until the price is returned to a good position or substantial purchasing orders to occupy their Bitcoin.
Lex Moskovski concluded by saying that miners can also accumulate if they receive more data than that accessible to retail audiences.
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