According to CryptoQuant, a cryptocurrency analysis company, Bitcoin miners have been accumulating coins since May 27, 2023, in anticipation of the next halving event in April 2024.
As is known, the halving will reduce the block reward from 6.25 to 3.125 BTC.
CryptoQuant tracks the amount of coins miners hold in their wallets and often claims to be good swing traders. The company shared a chart showing that miners have been sellers since August 2022, when the price of Bitcoin was above $50,000, and became buyers in May 2023, when the price dropped below $30,000.
The company also analyzed the net flows of Bitcoin entering and exiting spot exchanges, showing the buying and selling pressure in the market. CryptoQuant observed silent exits in the first half of July as the price hovered in a narrow range of $29,000 – $31,000.
However, there was a noticeable inflow to spot exchanges in the last week of July, which indicates that traders are reducing their risk against resistance and taking profits.
Another indicator that CryptoQuant uses to measure market sentiment is the Output Profit Ratio (SOPR), which shows whether holders are selling at profit or loss.
SOPR values hovering at 1 when the price is in a certain range indicate that no new money is coming in and that PvP (player versus player) trades dominate the market.
Finally, CryptoQuant also tracks Net Unrealized Profit/Loss (NUPL), which shows how much of the total market cap is in profit or loss. NUPL never reached the euphoria for Bitcoin in this bear market rally, which means most coin holders are still at a loss or at par.
CryptoQuant believes that the price level to trigger enthusiasm is between $34,000 and $40,000.
*Not investment advice.
