What's behind the recent Bitcoin crash? This is what the on-chain data says

Bitcoin’s on-chain data suggests that miner sales may have been behind the latest drop in the asset’s price below the $28,000 mark.

Bitcoin miners have shown signs of selling recently

As one analyst noted in a CryptoQuant post, miners had been putting some selling pressure on Bitcoin while the decline was occurring. A relevant indicator here is “net miner flow,” which measures the net amount of Bitcoin entering or leaving the wallets of all miners.

When this metric has a positive value, it means that a net amount of coins is being transferred to miners’ wallets at the moment. Such a trend implies that these chain validators are currently piling up, which naturally is something that could be bullish for the price.

On the other hand, negative values suggest that miners are transferring some BTC from their holdings at the moment. Usually, miners transfer their coins when they want to sell them. Therefore, negative netflow values can have bearish consequences for the asset.

Now, here’s a chart showing the trend in the 30-day simple moving average (SMA) Bitcoin net miner flow over the past week or so:

The metric’s 30-day SMA appears to have been quite negative in recent days | Source: CryptoQuant

As shown in the chart above, the 30-day SMA Bitcoin miner netflow recorded a very steep red spike when the price of the cryptocurrency was in the midst of its decline a few days ago.

BTC was just above $28,000 when this spike hit, but the asset quickly plunged to the low of $27,000 that followed. The timing of these large net miner outflows may be a sign that it was the selling of this cohort that contributed, at least partially, to the demise of the coin.

The Bitcoin 30-day EMA mining pool chart, a metric that measures the total amount of BTC all miners hold at the moment, also shows this spike:

It seems that the value of the indicator has recently plummeted | Source: CryptoQuant

This nosedive in the Bitcoin miner pool over the past few days naturally makes sense, as net flow is nothing more than a measure of changes taking place in this metric. On the chart, it is visible that while the outflows may have been sizeable, they have yet to significantly affect the total holdings of this cohort, meaning many miners are still sitting on their wallets.

Nonetheless, compared to the average over the last 365 days, the current outflows are very large, as the 14-day EMA Miners Position Index (MPI) data below shows.

The metric has skyrocketed | Source: CryptoQuant

It seems that the rate at which Bitcoin miners are selling right now (proportional to last year) is higher than what even saw the FTX crash in November 2022.

All of these indicators suggest that this extraordinary selling pressure from these headlines could be why BTC plunged to low levels of $27,000 a couple of days ago, something the coin has yet to recover from.