New data shows bitcoin miners are ending their long sell-off, which could signal the start of a new bull market.
Bitcoin miners end sell-off
The bitcoin price has stabilized. Something very important is happening in the background. It is clear that BTC miners are finishing selling their coins, thus reducing supply pressure. This should translate into price increases.
According to on-chain analytics firm CryptoQuant, the Hash Ribbons indicator — which tracks 30- and 60-day moving averages of Bitcoin’s hash rate — suggests that the miner capitulation is over. The hash rate has peaked, showing a solid recovery in miner activity. The rebound is notable because it’s the first such occurrence since the recent BTC halving.
CryptoQuant explains that while the Hash Ribbons indicator doesn’t indicate an exact local Bitcoin bottom, it often signals a price increase. This is all about a decrease in the aforementioned selling pressure from miners. This one is important because it means that miners are no longer forced to sell their Bitcoins to cover the costs of maintaining their machines. Earlier this year, they sold a significant amount of Bitcoins precisely because of the high operating costs.
Maartunn, an analyst at CryptoQuant, believes that miners have found new ways to keep their mines running despite the lower block rewards on the network, allowing them to keep their bitcoin reserves without having to sell them to cover costs such as new equipment, electricity or staff salaries.
Demand is growing
What’s more, demand for bitcoin is clearly growing, which also suggests that the consolidation phase may be coming to an end. Analyst Axel Adler Jr. noted that after BTC reached a certain price level, the average daily transfer volume increased significantly. This coincides with the stabilization of bitcoin’s price.
While the increase in transfer volume was initially fueled by panic selling, the rate is now fairly stable. The price stability over this period indicates fairly strong demand, with investors seeing the current rate as a buying opportunity.
Cryptocurrency analyst Quinten pointed out that Bitcoin’s bullish cycle typically begins around 170 days after the halving. We are currently on day 122 after the reward was split.
