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.
1/ Do miners still have the power to dump the price of $BTC in a world where daily mined bitcoin is likely a lot smaller than institutional buying? Discuss.
The Puell Multiple, which looks at miner rev today vs. historical norms is approaching the overbought red band… pic.twitter.com/ZZAY9R9tdO
— Philip Swift (@PositiveCrypto) March 11, 2021
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.
Can miners still dump price? I'll just leave this chart here. pic.twitter.com/nIo0OK0gHN
— Cole Garner (@ColeGarnerXBT) March 11, 2021
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.”
The Cycle Started, Mike Novogratz Says – Bitcoin Boom Is Here; Jack Dorsey Boosts BTC’s Price
Mike Novogratz is one of the essential names in the crypto space which is celebrating the booming price of Bitcoin.
Check out what he had to share with his followers and Twitter fans:
Crypto wealth is approx 50bps of global wealth. That means if you don’t have at least 1/2 percent invested in crypto you are short the global benchmark. Most institutions are still at 0. As they move in, that number will go to 1 then 2 then….
The cycle has started.— Mike Novogratz (@novogratz) October 16, 2021
Someone hopped in the comments section and said this; ‘Anyone who has not yet embarked on the crypto band wagon is a simple minded idiot who knows nothing about markets, freedom or wealth creation.’
Jack Dorsey boosts the price of BTC
It’s been also revealed that Jack Dorse said that Square could build a BTC mining system – this obviously triggered a more massive price race for the king coin.
At the moment of writing this article, BTC is trading in the green and the king coin is priced at $61,118.15.
CNBC online publication just noted that Square CEO Jack Dorsey said late on Friday the company is considering jumping into BTC mining business.
Dorsey tweeted that the company is considering a “bitcoin mining system based on custom silicon and open source for individuals and businesses worldwide.”
Square is considering building a Bitcoin mining system based on custom silicon and open source for individuals and businesses worldwide. If we do this, we’d follow our hardware wallet model: build in the open in collaboration with the community. First some thoughts and questions.— jack⚡️ (@jack) October 15, 2021
Dorsey’s goal would be to make crypto mining more accessible. We suggest that you check out the complete thread that Dorsey shared on his social media account in order to learn all the available details.
Pantera Capital’s Dan Morehead: Bitcoin (BTC) Already Up 100% in This Bull Run
How big is median increase in Bitcoin (BTC) price in bullish market phases?
As Bitcoin (BTC) reclaims $62,000 level, Dan Morehead, CEO of the first-ever cryptocurrency-focused VC firm in the U.S., shares the comprehensive statistics of the last six bull runs for Bitcoin.
Bitcoin (BTC) price doubled in 87 days: Bull Run 2021
According to the latest tweet by Mr. Morehead, the Bitcoin (BTC) price witnessed a 2x increase in the first 87 days of the ongoing bullish wave.
#bitcoin at $61,000 is 2x from where we mark the start of this new bull market in July.
For perspective, the median bull cycle went up 15x over 300 days.
More thoughts on the state of the market here: https://t.co/g46sxp7Qe6 pic.twitter.com/Iy96sJvZzO— Dan Morehead (@dan_pantera) October 15, 2021
Unlike many other experts, Mr. Morehead identifies two separate “bull run” phases in 2020-2021. During the previous one, between March 16, 2020, and April 14, 2021, it took 394 days for Bitcoin (BTC) to increase its price 13x and print a new all-time high.
According to his infographic, the most impressive rally ended with a 106x increase of the orange coin’s price in 2015-2017.
That said, the median Bitcoin (BTC) price bull run lasted for 300 days and increased the “king coin’s price” by 15x.
Will Bitcoin ETF mark the top of the BTC cycle?
At the same time, according to “The Next Price Era” letter issued by Pantera Capital on Oct. 6, 2021, the hotly-anticipated approval of Bitcoin (BTC) ETFs is listed amidst the possible “sell the news” events.
Mr. Morehead noticed that the launch of CME Bitcoin Futures and Coinbase direct listing triggered painful bear markets:
Will someone please remind the day before the bitcoin ETF officially launches? I might want to take some chips off the table.
As covered by U.Today previously, similar statements were made by CNBC’s Jim Cramer.
The seasoned analyst also revealed his plans to “cash out” 50% of his Ethereum (ETH) bags.
Bitcoin Will Significantly Underperform Altcoin Market As New Crypto Price Era Unfolds: Pantera Capital’s Dan Morehead
The founder and chief executive officer of Pantera Capital says that investors can expect altcoins to outperform Bitcoin (BTC) in the long term.
In a recent edition of Pantera’s Blockchain Letter, the head of the digital asset management firm outlines Dan Morehead’s key quotes from the SALT 2021 conference in New York. During the conference, Morehead said that even though his company has greatly profited from BTC, he emphasized that most future crypto gains will come from altcoin investments.ADVERTISEMENT
“My perspective is: Bitcoin has been amazing – Pantera Bitcoin Fund is up 67,000% since inception. However, I think the majority of future gains will be from tokens outside of Bitcoin. I know that sounds heretical to some people here, but that’s my professional opinion.”
Morehead compares the rise of Bitcoin and its competitors to that of the tech industry boom during the late 1990s.
“It’s like saying in 1998 that [the] majority of future tech gains would come from outside Microsoft.
At the time, Microsoft was worth $218 billion, Apple $3.5 billion, Amazon was $2.2 billion. Google and Facebook were zero – they didn’t even exist. In the years since Microsoft did great – it went up 10x. However, 80% of the tech gains in these five stocks came from outside Microsoft.
That’s the view I have here – I think BTC is going to go up a ton – like 10x. It’s a great investment…[but] I think the broader portfolio is going to outperform.”
At time of writing, BTC has a market cap of $1.156 trillion while all altcoins combined have a market cap of $1.327 trillion, according to CoinMarketCap.