- Massive amounts of short positions were taken against BTC by institutional investors.
- Miner revenue declined but stock prices of mining companies soared.
Over the past three months, the value of Bitcoin [BTC] experienced a significant uptrend. Nonetheless, recent market performance of the coin suggested a corrective phase, which has led to a decline in trader confidence.
Read Bitcoin’s [BTC] Price Prediction 2023-2024
Short positions rise
According to crypto analytics firm Arkham Intelligence, Andrew Kang has taken massive short positions against BTC. Andrew Kang is an institutional investor, and co-founder of crypto investment firm Mechanism Capital.
The overall market trend echoed Andrew’s sentiments. According to Coinglass’ data, the percentage of short positions taken against BTC increased from 47% to 50.6% in the last few days.
Source: Coinglass
Even though the trader sentiment against BTC was bearish, addresses continued to accumulate BTC. This was showcased by Glassnode’s data, which said that the number of addresses holding more than 0.1 coins have reached an all-time high of 4.3 million.
#Bitcoin $BTC Number of Addresses Holding 0.1+ Coins just reached an ATH of 4,314,542
Previous ATH of 4,314,449 was observed on 20 April 2023
View metric:https://t.co/hZY8dBLpzX pic.twitter.com/r343Qk0VtM
— glassnode alerts (@glassnodealerts) April 21, 2023
Coming to the miners, it was observed that they were facing a temporary period of hardship. Glassnode’s data indicated that miner fees have started to decline.
This led to a drop in their revenues. Over the last few days, the revenue generated by the miners fell from $31.63 million to $25.97 million.
Source: blockchain.com
Taking a look at the Miner Index
However, the challenges faced by the miners could be a temporary setback.
Data from hashrateindex showed that the Crypto Mining Stock Index has gained 115% so far in 2023, significantly above bitcoin’s 79% increase.
The Crypto Mining Index is a measure of the performance of mining companies, indicating the overall trend in the industry.
In 2023, the company Core Scientific gained 455% and is currently the top performer. Its massive debt boosted its equity during the market’s up-only environment, and improvements in mining economics positively impacted its cash flows.
Digihost, Cipher, Riot, Iris Energy, and Marathon are other solid performers.
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Interestingly, these companies have relatively low debt levels and are less financially leveraged than Core Scientific.
They have all surpassed expectations this quarter with strong monthly operational updates. However, it is uncertain whether the miners’ revenue will improve in line with the Crypto Miner Index.
Source: Hashrate Index
