Volatility this week could lead to a tug-of-war between selling F2Pool and buying Grayscale.
Bitcoin (BTC) fell to $28,950 on Jan. 22 due to miners presumably selling massive quantities of their holdings—but major investors made sure the fall was small.
According to data from the CryptoQuant on-chain tracking resource, significant outflows from mining pools have been detected over the past few days, which in turn corresponded to a 20 per cent reduction in BTC/USD in a week.
F2Pool daily outflows hit 10,000 BTC
In particular, the outflows from F2Pool—currently the largest mining pool, accounting for around 15 percent of the overall hash rate—began to grow from January 15. By January 17, daily outflows had reached 10,000 BTCs ($313 million), and lasted for three days in a row before returning to normal levels.
F2Pool seems to be responsible for the vast majority of the outflows, which do not actually suggest that the miners sold BTC on the free market, but rather transferred the mined coins from their initial wallet.
Irrespective of the motivations of the pool, the figures are a welcome counterargument to justify Bitcoin’s unexpected price decline this week. Previously, hypotheses, including the conflict over stablecoin Tether (USDT) and the recovering dollar, have been touted as the root causes of downward fluctuations.
Meanwhile, Bitcoin’s trading balances remained stable during January in comparison to the general downtrend that has been in effect since the summer of 2019, data reveals.
Sales come amid huge Grayscale buys
If the F2Pool coins were to generate a substantial volume of fresh BTC supply for sale on the market, it is possible that, once the consumer, in particular, hoovered them reasonably easily.
As Cointelegraph announced, wealth management giant Grayscale has added substantial sums to its funds under management this week, possibly allowing BTC/USD to escape a deeper dive.
The company’s recently released Q4 2020 survey, which reports that institutions have provided 93% of its inflows, compounds the impression that it is the biggest purchaser of any spare BTC stock.
CEO Michael Sonnenshein predicts that 2021 will see increased interest from financial advisors in Bitcoin space, along with a reduction in the associated investment risk.
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