Bitcoin (BTC) miners are sending record amounts of BTC to centralized crypto exchanges.
In a June 27 tweet, on-chain analytics platform Glassnode reported an all-time high in Bitcoin miner revenue sent to exchanges.
It noted that there was currently an “extremely high exchange interaction,” from Bitcoin miners which had sent a record $128 million to exchanges over the past week. This is equivalent to 315% of their daily revenue, the analytics platform noted.
There have been several spikes in miner revenue sent to exchanges during the 2021 bull run as they took profits. There was also a capitulation inflow in late 2022 as markets hit their cycle bottom.
However, this latest spike has dwarfed them all by a considerable margin.
Usually, when miners send BTC profits to exchanges they do so in preparation to cash out to cover their expenses and take profits.
This past week would be a good time to do so since BTC hit its highest price of the year so far, touching $31,185 on June 24.
At the time, CryptoQuant co-founder and CEO Ki Young Ju echoed the sentiment, stating that the current price-to-earnings ratio was at an “attractive price for miners to sell.”
Bitcoin prices are yet to be affected however, as the asset remains slightly above the $30,000 threshold at the time of publication.
Nevertheless, the current $31,000 price zone is a major resistance level for BTC, with markets failing to break it in mid-April and again in late June. If bulls can’t break new ground future losses are expected, especially if miners start liquidating.
Bitcoin mining profitability, or hash price, has increased slightly over the last week due to the rise in BTC prices. It is currently $0.076 TH/s (terahashes per second) per day, according to HashrateIndex.
Despite the price of Bitcoin increasing more than 88% year-to-date, miners are still facing some tough challenges. Profitability has slumped more than 30% since July last year and is down over 80% since the peak of the 2021 bull market.
When combined with almost record hash rates of 377 EH/s and peak difficulty levels, Bitcoin miners are still facing an uphill battle.
Increasing hash rates and difficulty, combined with higher energy prices, have put downward pressure on mining profitability. This means that selling their hard-earned Bitcoin may prove an unpleasant necessity to cover expenses.