Bitcoin (BTC) rose above $65,000 in the week starting July 12. A cooler Consumer Price Index reading supported the move, easing inflation concerns.
However, BTC later fell towards $64,000. Under this volatility, miners continued to send less money to exchanges despite worsening financial conditions.
Why are Bitcoin miners struggling?
CryptoQuant data showed that miners are facing serious pressure, according to the Miners’ Financial Health Index. The index combines mining revenue, fees, issuances and other inputs to measure the overall financial health of the industry.
According to the seven-day Moving Average, the index was around 29% at the time of writing. Readings between 10% and 30% have historically been consistent with bear market conditions.
Such conditions can depress miners’ incomes and increase their need to sell reserves. However, foreign exchange flow data showed that selling pressure has eased.
Are miners sending less BTC?
CryptoQuant’s Miner to Exchange Flow report showed that miners are transferring less Bitcoin to exchanges despite their financial difficulties. According to the seven-day SMA, currency flows decreased to 1,173.66 BTC from 1,825.86 BTC on July 1.
This represented a decrease of approximately 36%; This shows that miners are reducing their available supply of currency.
But lower foreign exchange flows do not necessarily confirm accumulation. Miners could also move coins through unmonitored locations or keep them elsewhere.
The dollar value of Bitcoin in miners’ wallets increased by $4.7 billion, from $71.5 billion to approximately $76.2 billion.
Much of this increase may reflect Bitcoin’s price appreciation rather than growth in miners’ BTC holdings. Bitcoin rose from $58,624 on July 1 to $63,999 at press time.
Why are mining stocks falling?
Publicly traded Bitcoin mining stocks have collectively lost 12% of their value in the past month, according to Artemis.
The decline highlighted the financial pressure mining companies face even as Bitcoin’s price recovers.
In five days, Cipher Mining (CIFR) is down 20.3% while Iris Energy (IREN) is down 18.3%. TeraWulf (WULF) fell 17.3%. In comparison, Bitcoin added more than $42 billion to its market value during the same period.
This difference shows that despite BTC’s recovery, investors remain concerned about miners’ operating costs and profitability.
Lower miner currency flows could reduce one source of immediate selling pressure. However, the data did not prove that miners were accumulating Bitcoin.
For now, miners’ reluctance to transfer BTC to exchanges could support supply conditions as Bitcoin tries to reclaim $65,000.
Final Summary
- Miner currency flows fell approximately 36% despite worsening financial conditions in the industry.
- As mining stocks decline sharply, lower currency transfers could immediately ease Bitcoin selling pressure.
