Bitcoin miners are funnelling unprecedented amounts of their daily revenue to crypto exchanges, an upward spike of 315%. Despite this, BTC prices are showing no significant response yet.
Recent reports from the on-chain analytics firm Glassnode indicate a surge in Bitcoin being deposited to centralized crypto exchanges by miners. An “extremely high exchange interaction” was noted, leading to a record $128 million worth of Bitcoin being moved to exchanges within the last week, equating to 315% of their daily revenue.
Profit-taking activities by miners were apparent during the 2021 bull run and a major inflow was observed when the market hit its lowest point in late 2022. However, the current spike dwarfs these previous surges by a significant margin.
Typically, miners transfer their BTC profits to exchanges as a preparatory step towards covering their operational expenses and pocketing profits. The past week presented an opportune moment for this given the year’s highest BTC price of $31,185 achieved on June 24.
CryptoQuant’s co-founder and CEO, Ki Young Ju, resonated with this analysis, affirming that the present price-to-earnings ratio provides an “attractive price for miners to sell.”
However, Bitcoin prices have not demonstrated any significant movement as the digital asset continues to hover just above the $30,000 mark.
Regardless, the current price zone of $31,000 poses a significant resistance level for Bitcoin, with previous failed attempts to breach it in mid-April and late June. A downturn is expected if bulls fail to shatter this barrier, especially if miners initiate a sell-off.
Despite the BTC price witnessing a year-to-date increase of over 88%, miners confront various challenges. Bitcoin mining profitability, or hash price, has increased slightly due to the BTC price surge and is currently at $0.076 TH/s (terahashes per second) per day, according to HashrateIndex. Nevertheless, profitability has plummeted more than 30% since July last year, down over 80% from the peak of the 2021 bull market.
Simultaneously, record hash rates of 377 EH/s and peak difficulty levels represent additional hurdles. Combined with rising energy costs, these factors exert downward pressure on mining profitability, rendering the sale of hard-earned Bitcoin a harsh but necessary move for covering expenses.