strategic Dump: Bitcoin Miners Masterfully Offload their Stash right before the Big Halving Party

2024-02-08, 16:23

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![](https://gimg2.gateimg.com/image/article/1707408700SDFXnew.jpeg)

## TL; DR

Since January 2024 <a href="/price/bitcoin-btc" target="_blank" class="blog_inner_link">Bitcoin</a> miners have been selling large amounts of BTC as we approach the halving event, expected in April.

The bitcoin miner reserves are very low at the moment.

Currently, the <a href="/price/bitcoin-btc" target="_blank" class="blog_inner_link">Bitcoin price</a> is fluctuating around $43,000.

## Introduction

With the long-awaited bitcoin halving event fast approaching several bitcoin miners have been offloading their BTC holdings which has depressed its price since mid-January. Analysts believe that [the halving event will occur in April this year](https://www.gate.io/blog_detail/1866/btc-halved-for-the-fourth-time-how-does-it-affect-the-supply-of-btc "the halving event will occur in April this year") and will reduce the mining reward from 6.25 to 3.125 BTC per block.

Today, we focus on the major reasons for bitcoin miners to dump the number one cryptocurrency on the market during January. We will also analyze the effects of the large bitcoin sell-off on its value.

Read also: [Bitcoin Halving: 85% Done](https://www.gate.io/blog_detail/3286/bitcoin-halving-85-done-long-term-holders-supply-inches-toward-record-highs "Bitcoin Halving: 85% Done")

## Bitcoin Miners Offload Large Quantities of BTC onto the Market

The bitcoin miners have been offloading much BTC on the market, increasing its selling pressure. That is one of the reasons the bitcoin price has been falling since mid-January.

As an example, on 17 January alone bitcoin miners sold over 10,000 BTC resulting in the largest daily drop in the mining reserves within a one-year period. As per [CryptoQuant](https://cryptoquant.com/asset/btc/chart/miner-flows/miner-reserve?miner=all_miner&window=DAY&sma=0&ema=0&priceScale=log&metricScale=linear&chartStyle=line "CryptoQuant"), an on-chain analytics provider, on 17 January the miners sold 10,233 BTC, worth about $450 million at the price prevailing at that time.

Based on the previous trend, there is a high likelihood that smart bitcoin miners will continue to sell bitcoin in the coming months until the halving date. As a fact, some miners sell bitcoin as a strategic move as we get closer [to the halving event](https://www.gate.io/blog_detail/1067/bitcoin-halving-what-it-is. "to the halving event").

![](https://gimg2.gateimg.com/image/article/1707409268btcMINERS1.png)
Source: [x.com](https://twitter.com/cryptoquant_com/status/1750654514263114197 "x.com")

In response to the above post, another X user explained why the miners might be selling their holdings in large quantities.  Natnah el said, “As a miner, it’s a very smart move to protect against the price /value uncertainty because it’s certain that the rewards will become less but no certainty on where the price will be by the time the halving event takes place.”

![](https://gimg2.gateimg.com/image/article/1707409289btcMINERS2.png)
Source: [X.com](https://twitter.com/effo_suave/status/1750657685836485081 "X.com")

As a result, the miners are taking profit before the halving event to cover for operational costs and to prepare [for other bitcoin mining related developments](https://www.gate.io/learn/articles/bitcoin-mining-a-path-to-electrifying-the-world/1367 "for other bitcoin mining related developments"). For instance, some of the miners need to purchase more efficient bitcoin mining equipment as they anticipate an increase in the mining difficulty after the halving event.

Since the bitcoin mining reward will decrease by half the miners’ income will likely fall unless the price of BTC increases during the post-halving period.

Again, as you note from Natnah’s explanation, the miners may be selling their bitcoin holdings in fear of strong price volatility after the halving event. In a related development, CryptoQuant has ascertained that the inflow of bitcoin from miners to exchanges has increased by more than three times, indicating strong selling pressure.

The effect of the rise in bitcoin selling pressure was evident [a few days after the SEC’s ETF approval](https://www.gate.io/blog_detail/3698/spot-bitcoin-etfs-approval-becomes-a-milestone-how-the-crypto-price-will-move-in-the-future "a few days after the SEC’s ETF approval"). Apart from the miners who have been disposing of much bitcoin, some whales have been selling their BTC holdings as well.

What also exacerbated the situation [was Grayscale Bitcoin Trust’s sale](https://www.gate.io/blog_detail/158/the-1st-cryptocurrency-investments-grayscale-what-is-gbtc "was Grayscale Bitcoin Trust’s sale") of around 106,575 BTC following the spot bitcoin ETF approvals. Significantly, on 12 January bitcoin reclaimed $40,000 after it had slipped below that level in previous days.

Also, the inflow of bitcoin to exchanges has resulted in a decrease in BTC mining reserves. Currently, the bitcoin mining reserves stand at around 1.83 million, valued at about $73.4 billion.

Although the mining reserves had been stable since 2021, they decreased by 22,800 BTC during the last 12 months. Nonetheless, on 15 January the [Bitcoin Miners’ Position Index (MPI)](https://cryptoquant.com/asset/btc/chart/flow-indicator/miners-position-index-mpi?window=DAY&sma=0&ema=0&priceScale=log&metricScale=linear&chartStyle=line "Bitcoin Miners’ Position Index (MPI)"), began to indicate that it was time for the miners to sell their BTC.

## Bitcoin Mining Goes in Cycles

The current bitcoin miner action is not surprising considering that there are several phases or cycles they pass through. According to the Bitfinex [2023 report](https://blog.bitfinex.com/wp-content/uploads/2023/08/Bitfinex-Alpha-67-1.pdf "2023 report") the bitcoin miners had been accumulating the coin since mid-2023 when its price was depressed. As the bitcoin value rises the miners continue to sell their coins. They began selling much of their holdings in December 2023.

Nevertheless, the selling momentum increased in January when the price of bitcoin was fluctuating between $42,000 and $49,000 as the next diagram indicates.

![](https://gimg2.gateimg.com/image/article/1707409355btcMINERS3.png)
Bitcoin Price, January & February 2024 – [CoinGecko](https://www.coingecko.com/en/coins/bitcoin "CoinGecko")

As the picture above shows, the price of bitcoin was fluctuating between $40,000 and $47,000 for the greater part of the mentioned period. At the time of writing, bitcoin is trading at $43,083, implying that most crypto investors who acquired BTC during 2023 may generate profit if they sell it now. For miners the period when they can rake in profit after disposing of their holdings is referred to as the selling phase.

## Current Bitcoin Price Volatility

In January bitcoin experienced a strong price correction from about $49,000 on the 11th. In its price fall it passed the $45,000, $43,500 and $40,000 support levels to settle at around $38,572. From that point, the price started recovering towards its current trading level, $43,083.

![](https://gimg2.gateimg.com/image/article/1707409371btcMINERS4.png)
Bitcoin price daily chart - [TradingView.com](https://www.tradingview.com/symbols/BTCUSD/ "TradingView.com")

As you can see in <a href="/price/the-graph-grt" target="_blank" class="blog_inner_link">The Graph</a> above, bitcoin is currently recovering from its recent dip. Basically, its value has climbed above the 50-day simple moving average. Also, an inverse head and shoulder candlestick pattern has formed, indicating that its price may rise higher in the next few days.

If BTC manages to close above $43,500 it may head towards the $44,850 price level and probably push past $45,000, $46,500 and $47,000. Once it reaches that price mark it may target the $48,750 level before retesting $50,000.

## Conclusion

Bitcoin miners have [been selling their BTC holdings](https://www.gate.io/blog_detail/451/btc-whale-holders-is-it-possible-to-know-who-they-are "been selling their BTC holdings") during the time its price has been fluctuating between $42,000 and $49,000. With such a price range they could make profit from their sales. As a result of the large bitcoin sales the miners’ reserves have decreased to very low levels.

## FAQs about Bitcoin Mining

### How ETF approval affected bitcoin mining sector?

The approval of spot bitcoin ETFs will increase the demand for the coin which may result in sustained price increases. The rise in the price of bitcoin means that BTC miners get higher margins when they sell the cryptocurrency. For instance, after the approval of bitcoin ETFs on 10 January there was an increase in BTC sales by the miners.

### What is bitcoin halving 2024?

Bitcoin halving is a process where the reward for mining a bitcoin block decreases by half. Bitcoin halving 2024, to occur in April, will slash the mining reward from 6.25 to 3.125 BTC.

### What is a factor for successful bitcoin mining?

There are several factors that influence the success of bitcoin mining including the mining difficulty, cost of electricity and the efficiency of the mining equipment. For example, bitcoin miners located in places where the price of electricity is low generate more profit than those in regions where the cost of power is higher.

### What is the advantage of bitcoin ETF?

Spot bitcoin ETFs are regulated investment instruments whose value correlates with that of bitcoin. Also, those [who invest in BTC ETFs do not face the challenges](https://www.gate.io/ar/blog_detail/3728/what-does-bitcoin-etf-introduction-mean-for-investors "who invest in BTC ETFs do not face the challenges") associated with the purchase and storing of bitcoin.

<div class="blog-details-info">
<div>Author:** Mashell C.**, Gate.io Researcher
<div class="info-tips">\*This article represents only the views of the researcher and does not constitute any investment suggestions.
<div>\*Gate.io reserves all rights to this article. Reposting of the article will be permitted provided Gate.io is referenced. In all cases, legal action will be taken due to copyright infringement.
</div>