Bitcoin Miners Are Back at the Beginning of the Cycle: Money is Coming into Their Pockets

Miners, considered the backbone of the Bitcoin network, have begun selling profits ahead of the halving, which occurs every four years.

The halving event reduces miners' block rewards by halving their profit margins. For this reason, miners sell Bitcoin in preparation for the halving period. This step is taken to cover operational expenses and provide capital for the next cycle.

After each halving, miners may temporarily stop some of their operations and secure their cash flows by selling their Bitcoin assets. When Bitcoin sets new highs, these sales increase and continue as a process of taking positions against the decline after the cycle. The Miner Position Index (MPI), which is used to track these movements of miners, compares the amount of Bitcoin leaving miners' wallets with the annual average. A high MPI indicates that miners are withdrawing more Bitcoin than normal and usually indicates that the Bitcoin price is approaching its peak.

With Bitcoin reaching new record levels recently, MPI has shown a slight increase. Converted to a 30-day moving average, MPI data provides a clearer view of cycle signals. When historical data is examined, the periods indicated by red circles indicate profit sales and price consolidation before the halving, while yellow circles indicate miner sales near the end of the cycle. Although price increases are seen after these periods, it is noteworthy that they usually end with a long-term downtrend.

In addition, the Bitcoin network's hash rate and mining difficulty have reached record levels. This data shows intense participation in mining activities and points to significant upside potential for the Bitcoin price.