Blockchain data shows bitcoin miners are accumulating coins and adding to bullish pressures in the market for the first time since December.
Analytics firm Glassnode's miner position change metric, which gauges the 30-day change in the supply held in the miners' addresses, recently turned positive in a sign of renewed holding by those responsible for making coins.
The balance held in miner wallets has increased by 4,435 BTC to 1.806 million over the past two weeks, Glassnode's data shows.
"Miners [now] have a net accumulation of liquid assets as they have enough cash in reserve to run their future operations, having liquidated holdings when the bitcoin price was between $20,000 and $40,000, or most of them are holding in anticipation of a price rally," Flex Yang, CEO of Hong Kong-based Babel Finance, said in an email.
Miners predominantly operate on cash and liquidate holdings to meet expenses. However, the pace of miner selling varies from time to time depending on mining-specific factors and bitcoin's price expectations.
The return to accumulation mode observed since March 31 comes after almost four months of largely negative readings – miners decreasing positions and taking profits. Peak distribution of roughly 17,000 BTC to 24,000 BTC was seen throughout January, according to Glassnode's weekly newsletter, dated March 8.
While miner flows constitute a small part of the total network volume, as tweeted by Glassnode's CEO Rafael Schultze-Kraft, accumulation by miners is analogous to increased promoter holding of corporate stock and is considered a positive indicator. "Their spending patterns provide insight into the sentiment of some of the biggest bulls in the Bitcoin market," Glassnode said in a newsletter published on April 5.
Whales, or large investors with the ability to influence prices, have also stopped selling coins.
The number of whale entities – clusters of crypto wallet addresses held by a single network participant holding at least 1,000 bitcoin – has steadied above 2,000 since March 31.
The figure dropped from 2,230 to 2,004 in nearly two months to March 31, mainly due to quarter-end rebalancing, according to blockchain analyst Willy Woo. It remains to be seen if these positive on-chain developments fuel the next leg higher in the cryptocurrency.
While bitcoin is currently trading moderately higher on the day near $58,500, it remains trapped in a narrowing price range. A breakout would mark a continuation of the broader uptrend typically experienced in the seasonally strong month of April.