Is Bitcoin due for a price correction?
- Bitcoin’s Puell Multiple recently reached its highest value of 2023.
- Metrics revealed that selling pressure on BTC was increasing.
Bitcoin [BTC] miners’ position has had an influence on the coin’s price over the past years. Their holdings and actions act as a key indicator to understand whether the king of crypto’s price is undervalued or overvalued.
If the latest data is to be considered, the miners’ current position suggests that BTC might witness a price correction.
Bitcoin miners are selling
An author and analyst at CryptoQuant, recently posted an analysis highlighting a key BTC indicator. The analyst talked about Puell Multiple.
The metric is calculated by dividing the daily issuance value of bitcoins (in USD) by the 365-day moving average of the daily issuance value.
Historically, Puell Multiple has accurately captured the tops and bottoms of the Bitcoin price, cycle by cycle, since 2012. Recently the metric spiked sharply, suggesting that Bitcoin’s price might be overvalued.
It was interesting to note that while BTC’s Puell Multiple surged, the blockchain’s hashrate also registered an increase. As reported earlier by AMBCrypto, BTC’s hashrate reached its highest point in the last seven days.
At the time of writing, the king coin’s hashrate stood at 513.44 EH/s. Coming back to miners’ activity, other datasets suggested that they have already started to sell their holdings.
AMBCrypto’s examination of Glassnode’s data revealed that miners’ balance has reduced drastically over the last few weeks, clearly indicating a sell-off.
As per CryptoQuant, BTC’s Miners’ Position Index (MPI) suggested that miners were selling holdings in a moderate range compared to its one-year average.
Is a price correction likely?
A possible reason behind miners’ selling BTC could be the coin’s positive price action. BTC enjoyed a comfortable rally, allowing it to remain above the $37,000 mark.
At the time of writing, BTC was trading at $37,382.61 with a market capitalization of over $730 billion.
BTC’s aSOPR metric suggested that investors at large were selling at a profit. In the middle of a bull market, it can indicate a market top.
Bitcoin’s net deposits on exchanges were increasing, further proving the fact that selling pressure was high.
Read Bitcoin’s [BTC] Price Prediction 2023-24
AMBCrypto then checked BTC’s derivatives metrics and found that while the coin’s price moved sideways, its funding rate remained stable.
Additionally, its open interest also remained flat, suggesting that the slow-moving price trend might continue longer.