On-chain data shows that OTC desks that Bitcoin miners like to use have seen their balances increase significantly, a sign that is historically negative.
Bitcoin miners have been pouring a lot of money into OTC desks lately
As pointed out by an analyst in a CryptoQuant Quicktake afterBTC miners have coins to over-the-counter (OTC) desks during the past three months.
OTC desks are platforms that facilitate direct transactions between individuals or institutions. Such selling and buying is more discreet than on centralized exchanges, so it can be difficult to track who is trading on these platforms.
However, analytics firm CryptoQuant has used on-chain data to identify certain addresses likely linked to OTC desks that miners like to use.
These are the wallets that miners often transfer money to. Since miners are usually taking coins out of their reserves to sell, it would make sense that the addresses they send to would be tied to the sales in some way.
Below is a chart showing the trend in the balance of these likely “OTC desks” of miners over the past decade.
The value of the metric appears to have sharply gone up in recent months | Source: CryptoQuant
As can be seen from the chart above, the miner’s OTC desk balance was at relatively low values earlier this year, even after the cryptocurrency surged to a new all-time high (ATH).
However, in the consolidation period that has followed since this ATH, miners have made significant transfers to these addresses. As the quant notes,
Bitcoin OTC desktop balances for miners have increased by more than 70% over the past three months, from 215,000 BTC in June to 368,000 BTC in August – an increase of 153,000 BTC.
The metric has not reached such a high level since June 2022. Given these large deposits, it seems that miners have been eager to sell their coins lately.
In the chart, the analyst has highlighted what happened in previous periods where the miner’s OTC desk balance followed a similar trajectory. It seems that such a pattern has historically led to a decline in the BTC price.
As for why miners have moved such a large amount of coins to these platforms, the answer may lie in an event that occurred in April of this year: the fourth Halving.
Halvings are periodic events that occur approximately every four years and permanently reduce Bitcoin’s value. block subsidy in half. Miners get the majority of their income from the block subsidy, so it is clear how these events could affect their finances.
Miners initially held off on moving to these platforms after this event, but that may have been because the market was still optimistic. However, as the consolidation continued, miners may not have been able to handle the pressure and decided to sell.
Considering what happened in the past when this pattern took shape, it is possible that BTC will experience a similar bearish effect this time around as well.
BTC price
At the time of writing, Bitcoin’s price is hovering around $61,300, up over 4% over the past seven days.
Looks like the price of the coin has bounced back over the past day | Source: BTCUSD on TradingView
Main image from Dall-E, CryptoQuant.com, chart from TradingView.com