Bitcoin [BTC] at the time of writing, it had been consolidating for days and was on the verge of a decisive step. The asset has failed to regain the $64,000 level for the third time in a row, and the momentum behind each attempt has weakened.
Bitcoin will need much stronger momentum to force a rally, and several factors will decide whether that happens. Among them, the role of miners cannot be ignored as their actions determine the direction of the market.
Bitcoin mining stocks remain underwater
Bitcoin miners, responsible for securing the network, have been trading underwater for weeks. Notably, over the past month, the Artemis Theme Tracker recorded a 10% decline for these Bitcoin mining stocks.
The tracker tracks eleven Bitcoin mining stocks currently valued at $102.9 billion. Iris energy [IREN] and Applied Digital [APLD] have absorbed the biggest losses over the past month, down 20.1% and 20% respectively, while Hut 8 Mining and Hive Digital Technologies are down 3.3% and 4.3%.
Cipher mining [CIFR] was the only name in the category to remain net positive, up 5.2% over the same period and outperforming the S&P 500, which rose 1.5% over the month.
The question is whether miners will lose their BTC, especially as mining costs rise; Combined with Bitcoin’s underperformance, that pressure could increase further.
What will Bitcoin miners do?
Miners have kept their Bitcoin positions steady despite the growing threat of market sell-offs. At the time of writing, the Bitcoin Miners’ Position Index (MPI) reflected short-term confidence at -1.1, with miners continuing to accumulate.
The metric measures the ratio of miners’ total USD outflows to their one-year moving average, and a value below that average generally indicates miners are holding on to their assets.
The Miner Supply Ratio, which tracks how much of the Bitcoin supply miners own, has also risen, an overall sign of accumulation.
The increase started on July 8 and has continued since, with the supply ratio reaching 0.05951 at the time of writing. A sustained rise would reinforce supportive dynamics for Bitcoin, provided miners keep their assets off the market.
Miners keep their reserves stable
Miners remain crucial to Bitcoin’s price movement as their decision to sell or hold can determine its direction.
The group controls roughly 1.1933 million Bitcoin, just over 5% of the market’s total supply, and any selling action could weigh on the asset and drag it down.
However, currently this group is doing the opposite, despite the decline in the price of Bitcoin in recent weeks. Their holdings have risen to 1.1938 million, one of the highest levels since early May.
Final summary
- Bitcoin miners are accumulating rather than selling, with holdings reaching as high as 1.1938 million BTC, even as mining stocks trade underwater.
- Bitcoin has failed to regain $64,000 for the third time in a row, and with the Miners’ Position Index at -1.1, miner conviction remains one of the few points of support supporting this value.
Credit : ambcrypto.com
