According to on-chain data tracked by Glassnode, miner balances across wallets started at 1.82 million BTC and are now back at the same level. The amount of Bitcoin accumulated by miners in 2022 will exceed the amount sold, wiping out the increase in miner balances.
Combined Bitcoin miner wallet balances surged dramatically in July 2022, hitting a two-year high, seemingly recovering from the May price drop associated with the Terra Luna collapse. But the same meltdown resulting from the Terra Luna crash has revisited crypto in the wake of FTX’s bankruptcy.
Hashrate has also started to drop in the past few weeks, indicating a decline in miner interest.
Net position changes for all minor BTC addresses have dropped to early January levels.
2022 has been a tough year for proof of work mining due to rising energy costs and a sharp drop in the Bitcoin price. As a result, miners resorted to selling large amounts of their crypto holdings, causing a significant net outflow.
Despite indicators pointing to darker times for bitcoin miners, investors are looking to on-chain data to signal a cycle bottom. Data show that the long-term holder accumulated high levels during his August-October period. Long-term sentiment for Bitcoin price is positive, but there are signs that LTH is selling positions. On-chain analytics tool CryptoQuant shows that long-term investors are already in a surrender phase.
Another potentially bullish indicator is the recent wave of migration to custodial wallets. The average cryptocurrency user is moving their balances off exchanges given the continued failure of centralized exchanges. While this shows a lack of trust in centralized exchanges, it is a good sign that retail investors are interested in cryptocurrencies for their long-term game.