Miners were compelled to sell their Bitcoin holdings in large quantities due to rising mining costs and declining profitability, as reported by Cryptoslate.
Since July, when the total Bitcoin supply held in miner addresses peaked at 1.84 million BTC, miners have traded almost 12,000 BTC. As reported by Cryptoslte, a similar surrender had a place in November 2021, when Bitcoin hit its record high, according to data from Glassnode.
Around 30,000 BTC were sold at that time by miners. In the coming weeks, there might be an even bigger sell-off if miners maintain this pattern throughout the fall. Although falling miner balances reflect a different image from hash ribbons, which indicate that the worst of the surrender is passed.
But in the long run, the steep sell-off over the past two months might be beneficial for Bitcoin. Even if they are harsh, oscillations in mining profitability rid the network of weak miners who cannot withstand the instability and unprofitable operations. The most resilient and successful miners will be left standing when the market stabilises, strengthening the Bitcoin network for upcoming cycles and volatility.
(With insights from Cryptoslate)