The cryptocurrency sphere is buzzing about the latest unusual Bitcoin activity where the miners appear to be selling more Bitcoin than they are mining.
In the past few days, from March 13 to 25, the market value of cryptocurrency increased from $3,867 to $7,000 according to the Bitcoin Price Index by CoinDesk. However, according to the figures given by miner’s rolling inventory (MRI), during this 81% recovery roundup, it was observed that miners sold more coins than they generated.
As the prices continued to increase, there was more than enough scope for the Bitcoin as the miners fed the market. Mining pools are responsible for the highest percentage of Bitcoin entering the exchanges and have a deep impact on the prices but there are some who take the market reaction as a positive sign.
Bitcoin activity is positive or negative?
According to the crypto research analyst at Digital Assets Data Connor Abendschein, when the Bitcoin prices go up even after being too low and the buyers take in the extra Bitcoin sold by miners without any issue, it indicates strength in the overall market. Thus deeming the recent Bitcoin activity a very positive thing.
— Charlie Morris (@AtlasPulse) March 25, 2020
Speaking on the Bitcoin activity the founder and Chairman of ByteTree, the crypto data company, Charlie Morris has tweeted that miners also ran down the inventory on Wednesday by selling 2,788 against 1,588 mined and crashed the market, raising hopes.
Even though cryptocurrency dropped from $6,700 to $6,500 during the Asian session it recovered the losses later in the day. However, other analysts believe that this one-day variation in the net miner sales is not enough to give out valid judgments regarding the market trends.
Alexander S. Blum, the chief operating officer (COO) at fintech company Two Prime believes that the Bitcoin activity may be a good thing. He believes that the sell volume was not significant enough to have a big impact on the large Bitcoin price movement and compared to the amount of Bitcoins in the world, these sales were less than 1%. But because miners have sold a lot more coins during the price recovery, it may be a sign of the actual market strength.
Despite the recent spike, cryptocurrency remains at risk due to upheaval in the traditional markets especially due to the threat of coronavirus that does not show any signs of slowing down.
Owing to this, the stock market also continues to face uncertainties that could turn into catastrophic damage, even more than what is being predicted at this time. One small example of this is the initial jobless situation in the US that has crossed three million in the last week and a further 1.5 million people are expected to lose jobs in the coming months.
Economic experts believe that the economic crisis is still to follow once the corona health crisis is over and it can be even worse than the great recession and the great depression and the financial sector must be ready for another liquidity crisis.