A bullish sign: Selling pressure from miners hit a multi-year low as miners are accumulating

Miners are vital to Bitcoin in many ways. For instance, Miners earn Bitcoin as a reward due to keeping the network secure. Because this reward is substantial, Miners tend to have a lot of Bitcoin. If they sell their holdings, we see a lot of sell pressure that is difficult to overcome, and the price of Bitcoin will stay stagnant or dump. Conversely, if Miners HODL their Bitcoin, a lot of sell pressure is removed, and the price of Bitcoin typically goes up.

On-chain data shows that the selling pressure from Bitcoin miners just hit a multi-year low, all the way from before 2020. This is generally bullish, as these local lows tend to happen before a significant price increase. Note that this selling pressure is measured by how many Bitcoin Miners sent to exchanges, which has a strong correlation to Bitcoin’s price.

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Selling pressure from miners.

This period of miner accumulation ends a period of heavy “capitulation”, in which a lot of miners sold a lot of their Bitcoin (see red periods below). We saw two such miner capitulation periods last year. These are also the "peaks" in the chart above during 2022 where a lot of Bitcoin was sent to exchanges. This capitulation is generally painful on the short term due to the selling pressure, but it was a much needed cleansing that absorbed a lot of selling pressure from Miners – and these are Bitcoin that will no longer be sold by them.

Red periods: miner capitulation