Bitcoin miner outflow has reached a 77-month high despite an overall positive trend in the crypto market.
According to on-chain intelligence firm CryptoQuant, the ‘Miner Outflow’ metric demonstrated the outflow of Bitcoin from mining pool wallets not seen since August 2017.
- The outflow metric doesn’t directly monitor funds transferred from miners’ addresses to crypto exchanges, potentially indicating sales. However, outflows provide a general indicator of sentiment, with increased outflows suggesting reduced overall holding.
- The outflow occurred during a period when Bitcoin showed large price movements, especially after the industry achieved a historic victory with the SEC’s approval of 11 spot BTC ETFs in the United States.
- The prospect of massive inflow in the Bitcoin market, as a result, pushed the asset’s price higher, and Bitcoin skyrocketed to over $49,000 for the first time in almost two years.
$BTC Miner Outflow (Total) hits a 77-month high.
Miner Outflow’s Definition and Interpretation 👇https://t.co/5QqFQVhHoy
— CryptoQuant.com (@cryptoquant_com) January 11, 2024
- Meanwhile, Bitcoin’s network hash rate clinched another record high this new year climbing near 550 Exa hash per second (EH/s). The figure has since settled a little over $511 EH/s.
- With an increased hash rate, Bitcoin’s price remains a crucial factor in determining how many miners remain operational. As such, a decrease in Bitcoin’s price would inadvertently translate into more machines to turn off the network, and the difficulty will adjust lower.
- Subsequently, the Bitcoin network will adjust as several players exit the mining game, freeing up space for other participants who continue to mine BTC.
- Larger BTC miners are expected to expand their operations while maintaining the network and capturing the potential upside if the asset’s value increases significantly in the weeks and months following the halving.