Why Miners' Bitcoin Stash is Closely Watched?
By now, you know that the Bitcoin network is kept alive by distributed super-nodes, some of whom are tasked with securing the network and confirming transactions.
Securing and transaction confirmation are incentivized since resources have to be dispensed. Bitcoin mining gear and electricity costs are up the roof!
As an incentivized process, every BTC mined is kept by the miner.
And here is when things begin to tick for traders and investors?
Would miners immediately sell or HOLD? What is their pace of liquidation or accumulation?
Accordingly, miners' actions must be watched.
After all, miners are the largest HODLers of BTC.
Therefore, if they mass HOLD or liquidate, it could trigger a FOMO or a FUD, causing prices to tank or rise.
If Bitcoin miners, in their estimation and prognosis, think BTC prices will rise in the coming days, most would refrain from selling and instead accumulate for capital gains.
On the other hand, if miners, based on their analysis, predict the BTC price to fall, most would liquidate at spot rates, causing fear and possibly a sell-off.
This is why, at the beginning or the peak of any rally, traders and investors would prefer to watch the action of Bitcoin miners for possible short-term trend determination.