Bitcoin [BTC] has seen a steady increase in price in recent weeks, sparking interest in the underlying factors driving this momentum.
Bitcoin [BTC] price movements have sparked interest in the underlying factors driving its recent rally. According to a CryptoQuant analysis, there is a notable correlation between Bitcoin ETF net flows and miner profitability, which could be influencing BTC price trends.
A glance at the Bitcoin ETFs shows that large positive net flows often occur near market peaks, while negative net flows tend to coincide with market bottoms.
This trend suggests that when capital flows into Bitcoin ETFs, it can lead to upward price pressure, while capital outflows may result in downward pressure.
Additionally, the miner profit/loss sustainability chart helps track whether Bitcoin miners are operating profitably based on the difference between Bitcoin prices and miners’ operating costs.
The chart identifies “overpaid” zones, when miners are generating significant profits, and “underpaid” zones, when miners are facing losses.
Taha's analysis offers key insights into how BTC prices are linked to miner profitability. As Bitcoin prices rise, miners tend to be in more profitable positions, as seen in March, June, and October 2024.
During these periods, miners generated significant profits, with miner sustainability metrics rising above 40.
However, when capital exits Bitcoin ETFs, miners' revenue can decrease due to the selling pressure, pushing them into a less profitable or loss-making position.
A notable example of this occurred in May 2024, when Bitcoin prices fell sharply, leading to a miner sustainability level of -60, indicating that miners were extremely underpaid.
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