The price of the world's largest cryptocurrency, Bitcoin, has dropped by about 10% since Monday, slumping to $27,200 on Friday.
Miners Are The Reason For The Drop In Bitcoin According To CryptoQuant
According to CryptoQuant, which provides on-chain and market analysis for crypto investors, this decline is due to increased selling pressure from miners.
CryptoQuant monitors various indicators that reflect the behavior of miners that secure the Bitcoin network and produce new coins.
One such indicator is the Miner Position Index (MPI), which measures the ratio of miner exits to their historical averages. A high MPI value means miners are moving more coins than usual, which may indicate an intent to sell.
According to CryptoQuant, MPI has risen sharply over the past few days, reaching the 2.5 level on Friday. This means that miners send 2.5 times more coins compared to their one-year average. The last time the MPI was this high was in January 2021, when Bitcoin also experienced a significant correction.
Another indicator that CryptoQuant monitors is the Miner Output Coefficient (MOM), which measures the amount of coins coming out of miner wallets against their historical averages.
A high MOM value means miners are transferring large amounts of coins to exchanges or other wallets, which may indicate selling pressure.
According to CryptoQuant, MOM has also increased over the past few days, reaching 1.8 on Friday. This means that miners carry 1.8 times more coins compared to their one-year average. The last time the MOM was this high was in May 2021, when Bitcoin dropped more than 50% from its all-time high.
CryptoQuant analysts believe these indicators show that miners have been exerting selling pressure on the Bitcoin market for the past few days. They also note that the cost of issuing one Bitcoin reaches around $27,200, which is close to the current price.
*Not investment advice.