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Bitcoin miners are making large deposits to crypto exchanges in the wake of this week’s $19 billion market rout.
Data from CryptoQuant shows about 51,000 Bitcoin flowing from miner wallets to Binance since October 9. That’s more than $5.6 billion in direct deposits from Bitcoin miners in the last week.
A spike in miner deposits to crypto exchanges is seen as a bearish indicator for Bitcoin, suggesting that miners are liquidating part of their reserves.
Just a month ago, miners were doing the opposite: stockpiling Bitcoin, signalling confidence even as their costs ballooned and margins thinned.
A decline in daily transaction fees on Bitcoin’s blockchain has worsened revenue problems for miners. Analysts have attributed those problems to the 2024 halving and the increase in the computing power required for miners’ operations.
Miner sell-offs have marked the latter stages in previous market cycles, and the current trend could amplify unease among Bitcoin investors.
Bitcoin traded at $110,500 on Thursday, down 10% over the last week.
Miners aren’t the only ones selling.
Significant outflows from Bitcoin exchange-traded funds amid the market turmoil have also occurred, totalling more than $108 million this week, according to data from Farside, a cryptocurrency investment manager.
Still, bullish sentiment remains.
Bitcoin options traders have sunk more than $1.7 billion into bets that Bitcoin will eclipse $130,000 before the end of this year.
Punters on crypto betting platform Polymarket are also similarly enthusiastic, as they give Bitcoin a more than 50% chance of reaching that same mark this year.
Market analysts at CryptoQuant say the $19 billion rout was a leverage flush, and Kyle Chassé, founder of venture capital firm MV Global, told DL News that Bitcoin will quickly recover.
Osato Avan-Nomayo is our Nigeria-based DeFi correspondent. He covers DeFi and tech. Got a tip? Please get in touch with him at osato@dlnews.com.