Bitcoin miners have been selling smaller amounts of BTC as the price of the flagship cryptocurrency moved up from $11,000 late last year to a $58,000 all-time high last month. Once they start taking profits, BTC could endure another correction.
According to the creator of on-chain data resource LookIntoBitcoin, Philip Swift, data shows that miners may be about to take profits and put significant selling pressure on the market. Swift’s warning came through analysis of the Puell Multiple.
The Puell Multiple, as Cointelegraph reports, was developed by David Puell and trackers when miners are likely to start selling their holdings to realize profits from finding new blocks and helping secure the Bitcoin network.
The indicator divides the value of newly minted BTC per day by the one-year moving average of its issuance, in USD, to gain insights on when miners may sell.
Historically, the indicator’s highs have coincided with bitcoin price peaks and subsequent sell-offs. With the multiple now closing in on the red sell-off zone, the price of BTC could drop significantly. The last time the indicator entered the red zone was in late 2017, before bitcoin’s 84% correction.
Some analysts, however, question whether miners can still influence the price of bitcoin the way they did back in 2017, as institutional investors have been entering the space over the last few months.
Moreover, corporate adoption has surged, to the point Square, MassMutual, Stone Ridge, One River, Seetee, Meitu and other companies have invested millions into BTC. MicroStrategy and Tesla stand out, as both firms have bought well over $1 billion worth of bitcoin.
Cole Garner, another analyst, responded to the data with a chart from on-chain analytics firm Glassnode showing that larger outflows from cryptocurrency mining Poolin appear to be correlated to BTC price corrections.
The potential miner sell-off comes as the price of bitcoin gets near a new all-time high above $58,000, seen last month. According to CryptoCompare data, one bitcoin is currently trading at $56,400 after testing the $58,000 mark and failing to go above it this week.
Despite the bearish indicator, most analysts appear to be bullish on BTC. Shark Tank star and investor Kevin O’Leary has changed his stance on bitcoin, saying the cryptoasset could reach a market capitalization of $20 trillion. During an interview O’Leary, who has earned the nickname ‘Mr. Wonderful,’ claimed a $100,000 price for bitcoin did not seem crazy.
Others have been even more bullish. Kraken CEO Jesse Powell revealed he believes the price of bitcoin could hit $1 million over the next 10 years, and in the long-term could “go to infinity.”
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