In the last week, multiple miner wallets dormant from the Satoshi era transferred out a significant amount of Bitcoin (BTC). Generally, when miners sell their Bitcoin, especially in a significant proportion, it can induce selling pressure leading to a price drop. However, despite recent miner selling activity, BTC rallied by over 7% hitting a top price of $64,043 on Friday.
Bitcoin Miner Sales Remain Price Neutral As 100-Day EMA Hits Yearly Low
On Friday, five wallet addresses last active in the Satoshi era i.e. the earliest days following the creation of Bitcoin, moved a combined 250 BTC, valued at $15.9 million to new wallets. These wallets had each received 50 BTC as mining rewards per block in 2009.
While these sudden Bitcoin transactions generated much speculation in the crypto community, there was no significant effect on Bitcoin’s positive price trajectory. Commenting on this development, a CryptoQuant analyst with username Darkfost explains that the latest spike in early miners’ outflows has exerted a neutral price effect due to a consistently falling 100-day EMA.
In this context, the 100-day exponential moving average helps to measure the average selling activity of early miners over the last 100 days, and can be used to identify trends and detect price momentum. According to data from CryptoQuant, Darkfost highlights that the latest sales by the early BTC miners have failed to alter the path of this 100-EMA metric which is currently at its yearly low.
Therefore, these outflows, while significant, are unable to produce a sizable selling pressure that could affect BTC’s price now or in the medium term.
BTC Up By 124% Despite Poor Mining Metrics
In other news, Bitcoin has produced a splendid price performance amidst poor miners’ fundamentals. According to the Bitcoin ChainCheck report by asset manager VanEck, the leading cryptocurrency had gained on its Year-To-Date (YTD) value by 124% bringing its market dominance to around 56%.
However, during this period, VanEck explains that the Bitcoin hash price which measures the amount of revenue miners earn per unit of computational power used for mining BTC had crashed by 97% indicating low miner profitability alongside heightened mining difficulty.
At the time of writing, BTC is trading at $63,146, reflecting a 0.23% gain over the past 24 hours. However, its daily trading volume has declined by 59.99% and currently stands at $14.1 billion. On the daily chart, Bitcoin is facing resistance around the $64,000 mark. A decisive breakout above this level could pave the way for a rally toward the $70,000 range. On the downside, insufficient buying pressure could result in a price slide to the $54,000 level.
Featured image from Simplilearn, chart from Tradingview
