- Bitcoin’s on-chain data suggests evidence that Bitcoin miners are dumping their assets.
- The factors affecting selling pressure could be a slowdown in Ordinals activity and mining difficulty and hash rate reaching all-time highs.
- Bitcoin Ordinals activity, which caused an increase in miner revenue, decreased in May, reducing miners’ earnings.
Current data on Bitcoin shows that Bitcoin miners are selling BTC as their income decreases.
Bitcoin Miners Could Be Selling Their Assets
Bitcoin’s on-chain data suggests evidence that Bitcoin miners are dumping their assets. The factors affecting selling pressure could be a slowdown in Ordinals activity and mining difficulty and hash rate reaching all-time highs.
According to on-chain analytics firm Glassnode, “Miners are sending significant amounts of coin to exchanges.” According to Glassnode data, Bitcoin miners’ entries to exchanges reached their highest level in three years on June 3 and reached levels seen in the bull market at the beginning of 2021.
Bitcoin Miners’ Entries to Exchanges
Coin Metrics data also shows a decrease in the metric that measures the amount of Bitcoin that comes in one step for miners. This metric measures the amount of Bitcoin stored in addresses that receive coins from mining pools.
The metric had been showing a continuous upward trend in miner assets since May 2023, but miners reversed the accumulation trend in the second week of June.
Increased Mining Difficulty and Decreased Ordinals Activity
Bitcoin mining difficulty is a metric that measures how difficult it is to find a new block in the Bitcoin blockchain network and reached an all-time high in early June.
Bitcoin difficulty is regularly adjusted to ensure that new blocks are added to the blockchain approximately every 10 minutes. It is adjusted to make mining more difficult when the computing power of the network increases and vice versa.
The difficulty is adjusted every 2,016 blocks, or approximately every two weeks, and is based on the total computing power of the network, known as the hash rate. The last adjustment took place on May 31, resulting in a 3.39% increase in total difficulty.
Bitcoin Mining Difficulty
An increase in difficulty reduces miners’ earnings, damages their profitability, and likely increases their losses.
In addition, competition among miners has increased since the last difficulty adjustment, and the network’s hash rate reached a new all-time high of 381 exahashes per second on June 11. The expected next difficulty adjustment this week will likely increase selling pressure.
Bitcoin Ordinals activity, which caused an increase in miner revenue, decreased in May, reducing miners’ earnings. The total fees paid for Ordinals on Bitcoin fell to their lowest level in two months, and the transaction volume in NFT markets showed a similar trend.
According to Glassnode data, miners’ seven-day average earnings fell from $33.9 million in May to $25.8 million at the beginning of June.
Bitcoin Miners’ Earnings (Orange) – Bitcoin Price (Black)
June is also a period when heat waves begin in the northern hemisphere, which puts a significant burden on some mining farms due to increased electricity costs.
In 2022, summer heat waves caused miners in Texas to temporarily shut down their operations. Texas is reported to account for about 15% of mining capacity in the United States.
In 2023, if heat waves worsen, there may be a decrease in the mining hash rate of the network.
