New on-chain data shows that Bitcoin miners have been selling recently. This edition is about to combine with May, which closed in the red 12/7 according to historical data. What will happen?
Bitcoin miner reserve has been on the decline since New Year’s rally started
As one CryptoQuant analyst pointed out, BTC miners have continued to reduce their reserves lately. “Mineral reserve” is an indicator that measures the total amount of Bitcoin that all miners currently hold in their wallets. When it rises, it means miners deposit money into their wallets. When it drops, it likely indicates they are using BTC to cover expenses.
Current data shows that miners are transferring some BTC from their reserves. Such a trend has particularly bearish consequences for Bitcoin, as one of the main reasons these investors withdraw funds from their wallets is for selling purposes.
The chart above shows that Bitcoin miner reserve saw a sharp drop in January when the rally started. This implies that investors are selling to make a profit. In this case, the drop in the metric is also quite sharp. According to the data, it exceeded the levels seen during the FTX crash in November of last year.
Another bearish signal for Bitcoin is the monthly candle of May, which closes 12/7 red according to historical data. Could this phenomenon be real once again?
Does “sell in May” apply to Bitcoin?
A quick glance at the history of Bitcoin shows that the “sell in May” principle does not directly apply. A look at the chart of each May candle for the past 12 years of Bitcoin history clearly shows that no clear pattern has emerged. According to the data, of the 12 candles, seven were green and five were red.
First, the green candles are getting smaller in size. This signals a potential drop in Bitcoin’s maximum gains. Second, both candles have been red in the last two years. This shows that a significant sale took place in May. While this is a coincidence, it is notable as it may indicate a change in trend.
BTC wins amid First Republic Bank collapse
Miner sales and May’s low price performance aside, the US banking crisis is among the major developments surrounding BTC. According to data from CoinGecko, 24 hours after the US Federal Deposit Insurance Corporation (FDIC) designated American banking giant JPMorgan Chase as the buyer of the troubled First Republic Bank, the total value of the cryptocurrency market fell by only 1.5%. At the time of writing, its TOTAL value was $1.21 trillion.
According to data from Coinglass, 21,908 traders have been liquidated in the overall cryptocurrency market. A $61.99 million liquidation took place in the last 24 hours. The data shows that especially long liquidations are intense in this period. This was a sign that the positive mood in the market continued.
Also, Santiment’s on-chain data revealed that Bitcoin, Ethereum and Binance Coin transaction volumes and daily active address counts increased significantly on May 1.
As Kriptokoin.com, we have included the latest developments from the US banking crisis this summer.
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