The market has absorbed the recent selling pressure from miners, indicating that the demand for Bitcoin remains strong.

Miners responsible for producing Bitcoin have been forced to sell off their inventory due to the drop in Bitcoin prices, increasing the supply of Bitcoin in the market. However, this has not disrupted the upward trend of Bitcoin (BTC), as the market demand is sufficient to absorb this additional Bitcoin supply, indicating that the overall market is bullish.

Miners Forced to Sell Inventory to Make Ends Meet

Over the 12 days from March 13 to March 25, the price of Bitcoin surged from $3,867 to $7,000. However, according to the Miner's Rolling Inventory (MRI) indicator created by the cryptocurrency data company ByteTree to track changes in miners' inventory levels during this 81% Bitcoin rebound, the amount of Bitcoin sold by miners exceeded the block reward production during this period.

The Miner's Rolling Inventory (MRI) has remained above 100 since Bitcoin fell below $4,000. An MRI value above 100 indicates that the amount of Bitcoin sold by miners to the market is more than what they are mining. An MRI below 100 indicates that miners are selling less than they are mining.

As reported yesterday, due to the significant drop in Bitcoin, miners were forced to shut down mining equipment to reduce operational costs. While this decision helped prevent further losses, miners still have to bear operational costs such as equipment, personnel, and facilities. As a result, some miners were forced to liquidate the Bitcoin they had accumulated, ultimately increasing the Bitcoin supply in the market.

Market Absorbs Miners' Deferred Supply

Among all categories of miners, the proportion of Bitcoin flowing from mining pools to exchanges is the highest and has a significant impact on prices. However, some believe that based on the market's response, the market conditions for Bitcoin seem better than expected. Connor Abendschein, a cryptocurrency research analyst at Digital Assets Data, stated:

"Bitcoin's price sharply rose after hitting bottom, coupled with market demand sufficient to absorb the delayed supply released by miners, and the market trend still bullish, indicating strength across the market."

On the other hand, Charlie Morris, the founder of ByteTree, pointed out that miners collectively mined 1,588 Bitcoins this Wednesday but sold 2,788 in the market. The delayed supply should have had an impact on the market, but the market absorbed this selling pressure.

However, Alexander S. Blum, Chief Operating Officer of the fintech company Two Prime, disagrees with this optimistic view, stating that the daily net sales variation of miners is usually small, and it is difficult to make a correct judgment on the market based solely on this data.

"Wednesday's sale of 2,788 Bitcoins statistically is not sufficient to have a significant impact on Bitcoin price trends. Miners' sales are less than 1% compared to the total circulating supply of Bitcoin."

Related Reading

• Bitcoin's Second Largest Difficulty Adjustment in History, Potentially Accompanied by Market Impact from Delayed Supply
• You Misunderstand, Miner Centralization Will Not Destroy Bitcoin

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