Earlier this month, the price of Bitcoin fell off a cliff. On March 12th, the day that has since been dubbed “Black Thursday,” the cryptocurrency fell from $7,700 to a price under $4,000 in a near-record level move.

This move caught most investors with their pants down. Case in point: some $1 billion worth of BitMEX positions were liquidated in a 24-hour period on that day alone. The thing is, there were red flags. One such red flag was that shared by Charlie Morris, founder of cryptocurrency analytics site ByteTree. Per his company’s data, he found that wallets mining Bitcoin had started to “sell less [coins] than they mine” around March 4th, just a week before the collapse.

Miners hoarding has “historically coincided with negative returns and reflects a weaker market bid” because “they want to protect the market which is too soft to sell into.”

#bitcoin miners have recently started to sell less than they mine. Historically, that has coincided with negative returns and reflects a weaker market bid. Miners are hoarding because they want to protect the market which is too soft to sell into. Bottom row turned green. pic.twitter.com/JPy0RqwEwQ

— Charlie Morris (@AtlasPulse) March 4, 2020

Morris backed up this assertion with this linked chart, which shows that whenever miners sell less than they mine, Bitcoin returns have been poor, with these periods actually accounting for much of the crypto’s losses.

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The thing is, ByteTree data has shown that miners have started to dump coins against the market, the inverse of the trend that predicted Bitcoin would see weakness earlier this month.

Bitcoin Mining Trend Is Bullish

According to a March 25th message from Morris, Bitcoin miners on that day sold 2,788 coins against 1,588 mined, resulting in $7.2 million in BTC sold that on a normal day would’ve been held.

Despite this added selling pressure, the price of the cryptocurrency didn’t drop, rather, the “market took it” and rallied. According to Morris’ analysis, this is a bullish sign.

Case in point: this chart from the analysis shows that whenever miners sell more than they mine (blue line), Bitcoin has outperformed the returns it posts during regular market conditions.

Despite this, there are some technical risks that may suppress the cryptocurrency.

Trader Nunya Bizniz found that Bitcoin’s weekly candle is currently below the bottom band of the non-linear regression curve that has acted as support for Bitcoin for over eight years of price action. In fact, the bottom band has started to act as resistance, not boding well for bull narrative.

BTC Weekly: Non-linear Regression Curve

Bottom band looks to be acting as resistance.@renato_shira pic.twitter.com/VOlQzD7Ogv

— Nunya Bizniz (@Pladizow) March 26, 2020

Related Reading: Ex-Goldman Sachs Exec: Bitcoin Likely to Surmount $20k Within 18 Months

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