While Bitcoin is looking to continue its upward trend, miners are increasing the pressure on the market by increasing their bitcoin sales.
Over the past two weeks, the king of digital currencies has been able to raise its price from $ 3867 to $ 7000, according to Coindesk. However, the Miner Variable Inventory Index (MRI) shows that bitcoin miners have sold more than they have extracted. Variable Minerals Inventory Index is an index developed by the ByteTree Statistical Company that aims to track mineral inventory and changes.
Miner’s inventory was above the 21-day interval leading to the recent bitcoin jump starting from 100. If the index is above 100, it means that the miners sell more than they mine, and their inventory decreases. On the other hand, if the index is lower than 100, it means that miners sell less than their extractive currencies and are increasing their inventory.
Due to rising prices and continuing this trend, people’s desire to buy bitcoin is so high that bitcoins are sold as soon as they are released.
Extraction pools have the largest share of bitcoin exchange rates, so their impact on the market is high. Many believe that the market reaction to these miners is a positive sign. Connor Abendschein, a digital currency researcher at a statistical company, says:
When bitcoin prices start to rise above the cross-section floor, buyers buy additional bitcoins supplied by the miner. This sale has little effect and is a sign of [increasing] market power.
Bite Terry founder Charlie Morris also wrote on Twitter on Wednesday:
The miners extracted 1588 Bitcoin and sold 2788 Bitcoin; this increased market pressure and, on the other hand, the market accepted this volume of sales.
Morris’s tweet was released in the European traders’ opening hours, shortly after the Asian opening hours, bitcoin jumped from $6700 to $6500;
Many other analysts believe that the one-day difference in the volume of miners’ sales is not enough to make any accurate conclusions about the market’s upside. Alexander Blum, chief executive of Two Prime, says:
The volume of sales of 2788 Bitcoin on Wednesday was not high enough to predict the price of bitcoin. Compared to the global bitcoin market, miners account for less than 1% of bitcoin sales.
However, since the miners have sold bitcoin more than they extract, it is likely that market power is increasing. In other words, given that the miners have sold bitcoin but the price has continued to rise, it seems that the recent increase in bitcoin prices is based on important factors.
It is also important to note that bitcoin is still vulnerable to the movements of traditional markets. The stock markets have come to life in recent days. The measures and financial measures taken by the US government in financial stimulus programs can be considered as the most important factor in reviving the stock markets.
On the other hand, it seems that the effects of the Coronavirus outbreak are still strong, which could exacerbate the shadow of the new economic crisis. Initial estimates, for example, show an increase of 3 million unemployed in the week leading up to March 21. On the other hand, another 1.5 million people are expected to be added. Meanwhile, the terrible predictions about the market situation are not low.
Peter Schiff, a fan of gold and a sharp critic of digital currencies, tweeted on Thursday:
If you think the current situation is an economic crisis, you are wrong. This is a health crisis. The economic crisis will be followed by this crisis due to monetary and financial treatment. This crisis is not only worse than the previous economic crisis, but it will be bigger than the big record.
Chris Thomas, director of digital assets at a Swiss bank, said in an interview:
We have to watch out for another liquidity crisis.