Why the Bitcoin miner sell-off may continue

Bitcoin miners are bearing the brunt of the bear trend since the beginning of the bear market trend. They watched as cash flow on the machines plummeted, forcing them to find other ways to finance their operations. The natural response to this is for public miners to tap their Bitcoin reserves and start selling BTC to keep them afloat. For a while, it seemed like miners would stop selling because of the price recovery, but that turned out not to be the case.

Miners offload more BTC

Bitcoin miners sold more bitcoins than were first mined in May. The same trend then continued into June, when miners sold thousands of BTC to cover operational and other costs. This trend did not appear to be over in June either, as miners continued to dump their coins.

In July alone, Bitcoin miners actually sold 5,700 BTC, the largest transaction to date, data shows. Again, these Bitcoin miners sold more BTC than they actually produced. A total of 3,470 BTC was reportedly produced that month, meaning they sold 50% more bitcoin than they mined.

These bitcoin miners sold more in a month, when some had to shut down operations due to rising temperatures. However, one of the miners turned the tables by making more money than they mined by selling energy credits to the Texas state government. The largest sellers were evicted as CoreScientific with 1,970 BTC and BitFarms with 1,600 BTC.

BTC recovers above $24,000 | Source: BTCUSD on TradingView.com

Bitcoin’s Bear Trend

Bitcoin miners are often one of the biggest whales in the market. This means that any action they take on their portfolio usually has an impact on the market. It is clear that when miners are not forced to sell their BTC, the price of digital assets continues to rise, and when they are dumping their tokens, the opposite is true.

The sell-off is all due to lower realized revenue on a daily basis, and since miner revenue has not increased significantly, miners are expected to have to continue selling. Daily miner revenue rose just 1.58% last week to $21.89 million.

If there is any reversal in this sales trend, Bitcoin miners will have to see more cash flow from their mining activities. However, with prices still low, these miners are realizing less revenue compared to a few months ago, while fees such as electricity and machines have remained the same or even higher in some cases.

Featured image from Analytics Insight, chart from TradingView.com

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