Transfer of bitcoin (BTC) from miners to centralized exchanges has picked up the pace since May 31, according to data tracked by blockchain analytics firm Glassnode.
Data from Glassnode shows miners or entities minting coins by verifying transactions on the blockchain have moved 6671.99 BTC ($174 million) to exchanges since May 31. On June 3 alone, miners moved 2,606 BTC to exchanges, the largest single-day tally in over four years.
The 14-day average of miner transfers to exchanges has increased sharply to 489.26 BTC, the highest since March 2021. Meanwhile, the balance in wallets associated with miners has decreased by nearly 2,000 BTC in two weeks.
The movement of coins from miner or investor wallets to exchanges is often equated with an intention to sell or liquidate coins. As such, increased movement of coins from miners to exchanges is widely perceived as bearish.
However, the recent transfers amount to just 1.3% of bitcoin’s 24-hour trading volume of $13 billion and do not appear big enough to have a sizable impact on bitcoin’s price.
Further, increased miner transfers are often taken to represent confidence in bitcoin’s price prospects. The logic here is that miners’ profitability is closely tied to bitcoin’s price and so they step up their sales when they feel the market is strong enough to absorb extra supply. This is akin to a central bank of a current account deficit nation buying U.S. dollars in the open market when the greenback is on the offer across the board. That way it is able to build reserves without risking local currency depreciation.
Bitcoin’s price continues to hover around in a familiar range above key support at $25,200, CoinDesk data show.
(Glassnode)
