2023-07-31 14:06:47
The price of Bitcoin has been stagnant for some time now, trading below the psychological $30,000 level. However, the latest on-chain data revealed that BTC miners’ reserves appear to be increasing despite the gloomy market conditions, indicating growing market confidence. According to data from CryptoQuant, the amount of bitcoin mining reserves was 1.841 million yesterday, July 30, compared to 1.826 million in May. The sharpest spike seen now, and also the sharpest in the last 12 months, suggests that more miners are opting for HODL tactics rather than selling coins in the short term. This behavior increases confidence in the crypto market, which has a positive effect on both the exchange rate and the industry as a whole. In crypto, bitcoin miner reserves are the amount of BTC held by all miners and mining pools. This is an important indicator for the exchange rate. It indicates the total amount of BTC still to be liquidated. It often happens that miners sell their coins to cover operating costs and realize a profit. For this reason, trackers like to monitor the trading habits of miners, as this gives them a sharper insight into market sentiment. The growing BTC mining reserve and relatively stable and steady exchange rates indicate optimism among miners. This might improve sentiment and boost miners’ confidence, possibly boosting prices later on. At the time of writing, BTC is trading at $29,384. Bitcoin ETF approval might send prices soaring In the coming months, the price of BTC may be affected by the decision of US regulators to approve a bitcoin fund (ETF) or not. Approval of a Bitcoin ETF would allow institutional players to add Bitcoin to their portfolios, injecting capital into crypto markets and potentially increasing liquidity. This would mean that any institutional asset manager holding such an ETF would be a custodian of sorts. Thus, they should build their own escrow infrastructure, which would bring significant development to the industry. Furthermore, mass adoption due to better accessibility, along with the halving in 2024, would be a strong indicator of a cycle in which prices might run wild, resulting in significant resources being poured into the sector In addition to price-related factors, ongoing criticism of Bitcoin’s proof-of-work network due to the significant energy consumption required for its operation. In response to environmental concerns, China banned Bitcoin and crypto-mining activities back in 2021, which led to a decrease in the network’s hash rate and negatively affected the price of BTC.
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