The current Bitcoin (BTC) mining activity may indicate a possible bullish momentum for the cryptocurrency market in the future. On-chain data shows that miners have reached the lowest sales level in the last three years.
Bitcoin miner sales are at their lowest in three years
Ongoing Bitcoin (BTC) rally is strongly supported by similar sentiments in the form of on-chain indicators. The positive sentiment is deeply affecting the market and even miners are reluctant to sell BTC at this time. This paves the way for a potential upside move in the coming weeks. Also, lower sales are more important considering the upcoming Fed rate hike announcement from the February FOMC meeting.
The fact that miners prefer to wait rather than sell could be a strong signal for a potential rally for altcoins as well. The FOMC, on the other hand, will meet between January 31 and February 1, when the committee could possibly raise the rate by 0.25%. This result supports bullish moves for Bitcoin and altcoins as more traders may want to take positions to hedge inflation-related losses. Additionally, the US Dollar Index (DXY) has been bearish recently, which could support the BTC price increase.
Also, sell orders from Bitcoin miners are currently at their lowest level in years. BTC transfer volume from miners to exchanges has remained stable since the FTX crash, though volume is in its lowest range since 2020. This means that miners are confident that the BTC price will increase even more and they want to make a profit. As Bitcoin Archive quotes Glassnode, “Selling pressure from Bitcoin miners has hit a multi-year low.”
How will the price be affected?
While low BTC sales are making the headlines, this metric is actually insignificant in many ways. During periods when cryptocurrencies are in a multi-month bear market, miners usually don’t sell unless they have to. This results in new lows being seen in the “Bitcoin Miner Sale” metric.
However, Bitcoin’s rally over the past few weeks has led to a sharp increase in market cap to realized value (MVRV). According to CryptoQuant analyst Greatest Trader, this indicates that the market may have entered a medium-term bullish phase.
Greatest Trader found that during the bearish market phases, Bitcoin’s MVRV suddenly dropped below its value, indicating that it was undervalued and a bear market floor was beginning to form. “Bitcoin had a surge and the bull market started,” says the on-chain analyst, whenever the MVRV goes above one.
There was a bull run going on in the current market where MVRV was higher than one. However, according to Greatest Trader, the recent rise in price may be followed by “sudden movements and high volatility”. Finally, analyzes of the daily chart show that the bullish trend in BTC’s market continues and has been so since the year started. cryptocoin.comAs you can follow, BTC is spending time below the $23,000 zone with sideways movements on January 24.
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