Bitcoin Miners Are On A Selling Spree; MPI Hits A 3-Year High
The price of Bitcoin recovered from yesterday's low of $17,650 to surge above $18,500. Currently, we are trading around $18,200 with $2.7 billion in volume.
However, it needs to be seen if the pain is over for now because miners have taken to selling a lot of their BTC today.
Although Young Ju remains bullish in the long-term, in the short-run, “this is not a good signal,” he said.
Bitcoin Miners Position Index has also hit a three-year high, which means miners are selling their BTC either in the OTC market or exchanges.
“MPI was skyrocketed three times and made local tops in the 2017 bull-run. BTC might have a pullback, but I think the price will go up eventually. I'm sticking with the long position for now,” he said.
Although the total outflow in itself isn’t that big, it is relatively increasing compared to what we have seen in the past few days. The number of outflow transactions is unusually high today as well, Young Ju added.
However, in the bigger scheme of things, these pullbacks are only seen as just noise. As Charlie Morris of Bytetree said, “Corrections within a bull market are an opportunity to buy.”
Bitcoin Rally Effect
Bitcoin miners have enjoyed the 150% YTD rally that has them generating about $522 million in revenue last month, up 48% from October. This sharp spike in revenue is the result of BTC price hitting a new all-time high in the month and the fees on the network surging as well.
Total daily transaction fees grew by 45.6% and averaged over $2M a day, signaling that the competition for block space is once again heating up.
Bitcoin miner profitability for 1 THash/s increased to $0.16 in November from the previous month’s $0.063, as per Bitinfocharts. In the last month of 2020, it is keeping above $0.1, so far. Miners are taking advantage of this increase in revenue and bringing more machines online.
According to Marathon's website, Marathon Patent Group purchased 10,000 Antminer S19jPro, worth about 20-30 million U.S. dollars. The first 6,000 units will be received in August 2021, and the remaining 4,000 units will be delivered in September 2021.
— Wu Blockchain（Chinese Crypto Reporter） (@WuBlockchain) December 10, 2020
In contrast, Ethereum (ETH) fees are dropping after reaching over $5M a day at the end of November, currently hovering between $2 and $2.50 over the past week, while BTC’s mean transaction fee has risen above $6.
As for dry powder, stablecoins have also seen huge growth this year, with the combined market cap of all stablecoins growing nearly 400% YTD.
Although Tether (USDt) remains the most dominant stablecoin with its total supply close to 20 billion, USDC has been growing at a faster rate than Tether over the last few months, hitting another milestone of its supply passing 3 billion.
“Used extensively in DeFi and now also used as a method for providing foreign aid, USDC is poised for continued growth in 2021,” noted Coin Metrics.