• 21 November, 2024
News

Bitcoin Miners Selling Off Holdings as “Bankruptcy” Looms

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According to cryptocurrency Charles Edwards, Bitcoin (BTC) miners are in turmoil and are selling off their holdings at a rate last seen 5 years ago. Introducing a technical indicator of his making dubbed “Bitcoin Miner Sell Pressure,” the analyst explained that the indicator tracks the ratio of on-chain miner Bitcoin outflows to miner Bitcoin reserves.

Technicals go bearish

The indicator marks “extraordinary” selling from miners as red. Edwards stated that the indicator was completely red the past 24 hours, meaning miners have been heavily selling off their stash. The analyst added that miners usually sell “when they are losing money.”

Edwards went on to explain:

“Bitcoin Miner Sell Pressure identifies industry stress,  excess, and miner capitulation. Unsurprisingly, there is a high correlation with Bitcoin Production Cost, giving strong confluence to both.” 

Miners close to bankruptcy

Similarly, CryptoQuant contributor MAC D has warned that “bankruptcy” for miners is a real possibility in the near future. Mining became unprofitable for many as the Bitcoin to US Dollar exchange rate dropped by 20% in a matter of days, making the block subsidies and transaction fees they received inadequate to cover their expenses. As a result, miners have been forced to sell Bitcoin in order to fund their expenses and turn their mining rigs down.

“BTC security is at an all-time high, but mining volume is gradually decreasing,” MAC.D warned, adding that it will “strangle” miners. He noted that on November 9 alone, miners had sold more than 5,400 BTC from their wallets, which “can be interpreted as increased selling pressure.”

Meanwhile, journalist Colin Wu has observed that some of the best bitcoin mining hardware on the market is currently operating at a loss. According to reports, bitcoin mining equipment such as the Whatsminer M30S and Antminer S17Pro have dropped below the shutdown price as a result of the 20% drop in BTC price.

At the time of writing, BTC was down 5.6% over the past 24 hours and more than 16% over the past week. The selling pressure from miners could further add to the decline, pushing prices lower.

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