By Shelly Melancon (Switzerland)
The Bitcoin price suddenly began to rise after the official release of the United States inflation metrics. The market correction did little to stop the brief rise in the price of the flagship digital currency as the inflation rate in the U.S. soars.
However, Bitcoin miners have in the last month increased their outflows, contributing to the dwindling market fortunes.
One of the leading Bitcoin mining hubs, Kazakhstan, has announced new tax laws to limit crypto mining in the country. The new tax policies target crypto mining firms’ use of energy for operation. That is, the tax rate depends on the source of energy consumption adopted by the mining companies.
The current atmosphere in the mining sector is becoming gloomy as prices for Bitcoin mining rigs have declined further. The broader crypto market collapse and the drop in the global trading volume of digital assets have made mining less profitable.
Governments’ are now imposing strict measures by halting crypto mining to reduce the load on power grids. Kazakhstan and Texas (USA) are examples of such.
Bitcoin Mining Inflows Now at an All-time High
According to multiple reports, Bitcoin miners have shifted more than 14,000 BTC to a single block. Amid the market downtrend, the latest transfer is a blow to the crypto-assets industry’s recovery. However, other reports indicate that the transferred tokens are yet to be spot traded.
According to Glassnode, the NetFlow Volume of BTC miners on the 7-day moving average (M.A.) has clocked $1,779,953, an all-time high. Similarly, the first week of the year also shows an all-time high of $1,700,940.
However, the CEO of CryptoQuant, Ki Young Ju, noted that the outflows did not just end with the exchange wallets. They are mostly used as OTC trading items or as a plunge into custodial products. Ju opined that this move could result in a bullish or bearish trend.
Is a Price Surge Likely?
It appears that miners’ movement of BTC tokens leads to open interest in the asset. There is a high possibility of future growth for Bitcoin. Moreover, the mining reserve for Bitcoin has dropped over the past few weeks.
On a broader scale, the decline in mining activities may point to decreased price sentiment for Bitcoin. Still, the situation is not as gloomy as was envisioned by many over the past few days.
The past 24 hours have witnessed a price resurgence for BTC by over 6%. The largest cryptocurrency currently trades at $20,953 on the average trading session. Meanwhile, the trading volume for the past 24 hours was $32.8 billion.
Interestingly, active addresses on the Bitcoin network have also increased, as per the Santiment report. At the time of writing, the number is roughly one million. Bitcoin recorded an improved performance from the previous 860,000 on July 14.
Investors’ sentiment towards BTC is fast changing, and the token can do well to keep the negative sentiments at bay in the meantime.
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