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Are Bitcoin Miners Expecting an End to the Price Rally?

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Are Bitcoin Miners Expecting an End to the Price Rally?

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Atypical trading patterns from Bitcoin miners indicate they are expecting the price rally to soon come to an end.

While it is not uncommon for miners to sell off a portion of newly-gained coins to cover operating costs, the extent of their sales suggests they are looking to sell before their work becomes less profitable. Reports indicate that in the month of June and the majority of July, the average miner was, in fact, working at a financial loss.

What is particularly unusual about the sales from miners is that the last 24 hours have seen them sell more Bitcoin than they created. They reportedly mined an aggregate of approximately USD 14.4 million in coins, selling a total of USD 17.3 million. Recent trends from the miners show that they have tended sell around the USD 10 million mark of their holdings, averaging less than their daily earnings.

An end to the rally, or just covering costs?

Alternatively, if miners are not expecting an end to Bitcoin’s rally, perhaps the last few unprofitable months have required immediate sales to cover the growing overhead.

Kyle Samani, a managing partner at Multicoin Capital Management weighed in on the subject, speculating that it was likely many miners are currently no longer waiting for a price appreciation to sell, although he did not share any particular reason as to why this might be.

The co-founder of analytics provider Coinmetrics Nic Carter filled this gap by suggesting that miners could not afford to not sell all of their freshly minted coins right now due to the recent relatively low prices. Coinmetrics also suggests that many miners have left the market since Bitcoin’s price highs of December that saw the cryptocurrency reach nearly USD 20,000.
Bitcoin has managed to jump 40% since the start of July, hitting USD 8,000 this week and recovering to May price levels.

 

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