Bitcoin (BTC) may be approaching a local top, according to CryptoQuant CEO Ki Young Ju, who based his analysis on miners selling the cryptocurrency.
What Happened: Ki pointed to a metric called Miners’ Position Index (MPI), which is the ratio of all BTC leaving miners to the coin’s one-year moving average.
A value above 2 indicates that most miners are selling.
Miner Position Index looks enough to make a local top. They're selling $BTC.— Ki Young Ju 주기영 (@ki_young_ju) January 10, 2021
I'm going to punt a small short to scalp $BTC in this short-term bearish market.
Chart https://t.co/RbSJ9xbC56 pic.twitter.com/7RbQN7BgwW
The MPI hit 4.52 on Jan. 7, as Bitcoin approached $40,000 levels, as per CryptoQuant data.
Why It Matters: The BTC sale by miners is diametrically opposite to institutional investors who made record Bitcoin purchases as the apex cryptocurrency crossed $30,000 levels, also noted by Ki last week.
Willy Woo, an on-chain analyst, said in May that there are two factors that add selling pressure in the market after the block reward halving — Miners who dilute supply and sell on to the market and exchanges who tax traders and sell onto the market, Cointelegraph reported.
Miners have been beneficiaries of the 300% spike in Bitcoin prices in 2020 as they mopped up $692 million in revenue in December alone, a 33% jump over the preceding month, noted CoinDesk.
Price Action: Bitcoin traded 10.62% lower at $36,964.10 at press time. Grayscale Bitcoin Trust GBTC closed 1.22% lower at $44.42 on Friday.
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