Bitcoin Miners Prefer HODLing Over Selling, BTC’s Risk/Reward Ratio Attractive At Current Price

Bhushan Akolkar
March 24, 2021 Updated July 23, 2022
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Bitcoin Miner Northern Data Revenue 2024

Bitcoin (BTC) continues to trade in a downward pressure consolidating around $54,000 levels. However, the world’s largest cryptocurrency valuations stay above $1 trillion and will probably never go below that ever again.

The reason is that the on-chain data shows that long-term holders have been buying the recent dips in the market. Interestingly, as the BTC price has fluctuated between the $53K-$61K levels, Bitcoin Miners have resolved to HODLing instead of selling and booking profits.

“It is rational for publicly traded #Bitcoin miners to become net purchasers of BTC rather than sellers,” says MicroStrategy CEO Michael Saylor.

On the other hand, the Bitcoin supply at the exchanges continues to fall further. On Tuesday, March 23, nearly $1 billion worth of Bitcoins (BTC) has moved off the Coinbase exchange in what seemed like an institutional purchase. Analysts Willy Woo points out that the exchange outflows suggest that coins have been moving to long-term holders who have a minimal history of selling.

The recent fall in the ‘Bitcoin (BTC) supply at the exchanges’ coincides with the downfall before the 2017 bull run. Thus, the shortage of supply has always resulted in major price rallies ahead.

Bitcoin’s Reserve Risk Present an Attractive Risk/Reward for Buying

On-chain data provider Galssnode states that Bitcoin’s reserve risk is currently sitting at a very comfortable zone of 0.008. During the previous BTC tops, Bitcoin’s reserve risk crossed 0.02 levels. Glassnode notes:

“Reserve Risk indicates a strong conviction of long-term holders at these price levels. The current risk/reward ratio to invest and hodl is still attractive compared to previous $BTC cycle tops”.

Courtesy: Glassnode

Thus, there’s still much gas left in the Bitcoin price rally. Analysts are already predicting Bitcoin to touch $100K levels by the end of the year. On the other hand, another bullish indicator is that the aggregated open interest for Bitcoin (BTC) price continues to stay above $20 billion.

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Investment disclaimer: The content reflects the author’s personal views and current market conditions. Please conduct your own research before investing in cryptocurrencies, as neither the author nor the publication is responsible for any financial losses.
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Why Trust CoinGape

CoinGape has covered the cryptocurrency industry since 2017, aiming to provide informative insights Read more…to our readers. Our journal analysts bring years of experience in market analysis and blockchain technology to ensure factual accuracy and balanced reporting. By following our Editorial Policy, our writers verify every source, fact-check each story, rely on reputable sources, and attribute quotes and media correctly. We also follow a rigorous Review Methodology when evaluating exchanges and tools. From emerging blockchain projects and coin launches to industry events and technical developments, we cover all facets of the digital asset space with unwavering commitment to timely, relevant information.

About Author
About Author
Bhushan is a seasoned crypto writer with over eight years of experience spanning more than 10,000 contributions across multiple platforms like CoinGape, CoinSpeaker, Bitcoinist, Crypto News Flash, and others. Being a Fintech enthusiast, he loves reporting across Crypto, Blockchain, DeFi, Global Macros with a keen understanding in financial markets. 

He is committed to continuous learning and stays motivated by sharing the knowledge he acquires. In his free time, Bhushan enjoys reading thriller fiction novels and occasionally explores his culinary skills. Bhushan has a bachelors degree in electronics engineering, however, his interest in finance and economics drives him to crypto and blockchain.
Investment disclaimer: The content reflects the author’s personal views and current market conditions. Please conduct your own research before investing in cryptocurrencies, as neither the author nor the publication is responsible for any financial losses.
Ad Disclosure: This site may feature sponsored content and affiliate links. All advertisements are clearly labeled, and ad partners have no influence over our editorial content.