Bitcoin miner outflow ratio hits 6‑month high in new threat to BTC price

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Bit­coin (BTC) is enter­ing a prime “low-risk bot­tom” zone as sell­ers final­ly accept FTX losses.

Data from on-chain ana­lyt­ics firm Glassnode shows that sell­er exhaus­tion is reach­ing ide­al lev­els for a BTC price leg up.

Bitcoin sellers face low BTC price volatility

Almost one month after the FTX implo­sion began, Bit­coin investors have either capit­u­lat­ed and sold at a loss or con­tin­ue to hodl unre­al­ized loss­es.

As Coin­tele­graph report­ed, those loss­es became sig­nif­i­cant just days after the event, with over 50% of the BTC sup­ply held in the red.

Now, anoth­er on-chain met­ric is paint­ing a poten­tial­ly more bull­ish pic­ture when it comes to hodlers’ loss-mak­ing BTC investments.

The Sell­er Exhaus­tion Con­stant, which mea­sures the rela­tion­ship between sup­ply in prof­it and 30-day volatil­i­ty, is repeat­ing behav­ior from June this year.

Orig­i­nal­ly cre­at­ed by ARK Invest and David Puell, respon­si­ble for the Puell Mul­ti­ple, the Sell­er Exhaus­tion Con­stant sug­gests that when volatil­i­ty is low but loss­es are high, it is less like­ly that Bit­coin will go lower. 

“Specif­i­cal­ly, the com­bi­na­tion of low volatil­i­ty and high loss­es is asso­ci­at­ed with capit­u­la­tion, com­pla­cen­cy, and a bot­tom­ing out of the bit­coin price,” ARK explained about the met­ric in a research piece, “A Frame­work for Valu­ing Bit­coin,” in 2021.

That sit­u­a­tion reflects the cur­rent sta­tus quo, and if June price action repeats itself, a relief ral­ly should be due for BTC/USD.

In its own descrip­tion, Glassnode describes such con­di­tions as “low-risk bottoms.”

Bit­coin Sell­er Exhaus­tion Con­stant chart. Source: Glassnode

Bitcoin miners in pain aga

Hur­dles to that relief ral­ly com­ing to fruition nonethe­less remain.

Relat­ed: Cryp­to and Capit­u­la­tion — Is there a sil­ver lin­ing? Watch Mar­ket Talks on Cointelegraph

Bit­coin min­ers, feared to be enter­ing a new wave of capit­u­la­tion, have upped sales of BTC reserves, data confirms.

Fac­ing a per­fect storm of record hash rate and fad­ing prof­it mar­gins, min­ers have sig­naled that upheaval is com­ing, with Bit­coin net­work fun­da­men­tals only now begin­ning to adjust to reflect it.

“We are poten­tial­ly enter­ing into a dou­ble dip min­er capit­u­la­to­ry peri­od,” William Clemente, co-founder of cryp­to research firm Reflex­iv­i­ty Research, warned this week, refer­ring to the pop­u­lar Hash Rib­bons met­ric used to mon­i­tor min­er profitability. 

“Hash rib­bons have just ini­ti­at­ed a bear­ish cross, his­tor­i­cal­ly this has been a lead­ing indi­ca­tor of min­er capitulation.”

Bit­coin Hash Rib­bons chart. Source: William Clemente/ Twitter

Glassnode’s min­er out­flow mul­ti­ple, which mea­sures BTC out­flows from min­er wal­lets rel­a­tive to their one-year mov­ing aver­age, is now at its high­est in six months.

At 1.073, the mul­ti­ple — as with sell­er exhaus­tion — nonethe­less echoes the June macro BTC price bottom.

Bit­coin min­er out­flow mul­ti­ple chart. Source: Glassnode

The views, thoughts and opin­ions expressed here are the authors’ alone and do not nec­es­sar­i­ly reflect or rep­re­sent the views and opin­ions of Cointelegraph. 



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