Bitcoin ($BTC) made more than $65,000 for the week ending July 12th. The move was supported by a slowdown in the consumer price index, which eased inflation concerns.
but, $BTC It then retreated towards $64,000. Under this volatility, miners continued to reduce the number of coins they sent to exchanges despite the deteriorating financial situation.
Why are Bitcoin miners struggling?
CryptoQuant data showed that miners are facing significant pressure based on the miners’ financial health index. The index combines mining revenue, fees, issuance, and other inputs to measure the financial health of the industry as a whole.
Based on the seven-day moving average, the index was near 29% at the time of writing. Measurements between 10% and 30% are historically consistent with bear market conditions.
This situation could put pressure on miners’ incomes and increase the need to sell reserves. However, currency flow data showed selling pressure has eased.
Is miner sending volume decreasing? $BTC?
CryptoQuant’s miner-to-exchange flows showed that miners are sending fewer Bitcoins to exchanges despite the financial burden. Based on the 7-day SMA, the exchange flow decreased from 1,825.86. $BTC From July 1st to 1,173.66 $BTC.
This corresponds to a decrease of nearly 36% and suggests that miners have reduced the supply of readily available exchanges.
However, the decline in exchange flows did not necessarily support accumulation. Miners could also have moved the coins through untracked venues or stored them elsewhere.
The dollar value of Bitcoin in miner wallets increased by $4.7 billion, from $71.5 billion to approximately $76.2 billion.
Much of this increase likely reflects Bitcoin price growth rather than miner growth. $BTC Collection. Bitcoin has risen from $58,624 on July 1st to $63,999 at the time of writing.
Why are mining stocks falling?
Publicly traded Bitcoin mining stocks have fallen a total of 12% in the past month, according to Artemis.
Despite the recovery in Bitcoin prices, the decline highlighted the financial pressures facing mining companies.
Over five days, Cipher Mining (CIFR) fell 20.3% and Iris Energy (IREN) fell 18.3%. Terrawolf (WULF) fell 17.3%. In contrast, Bitcoin has increased its market capitalization by over $42 billion over the same period.
This divergence nevertheless suggests that investors remain concerned about miners’ operating costs and profitability. $BTCrecovery.
A reduction in the flow of minor trades could reduce one source of immediate selling pressure. However, this data did not prove that miners were accumulating Bitcoin.
For now, miners are reluctant to relocate $BTC Exchange supply conditions could provide support as Bitcoin attempts to regain $65,000.
Final summary
- Despite the deteriorating financial condition of the industry as a whole, flows on minor exchanges decreased by nearly 36%.
- Mining stocks have fallen sharply, but a weaker exchange rate could ease some of the immediate Bitcoin selling pressure.
