Bitcoin Miner Outflows Spike in January, but Public Sales Remain Limited

Bitcoin’s price remains confined within a narrow trading range between $67,300 and $71,751 as market participants await clearer signals of a potential bottom. On-chain data suggest half of the BTC-USD supply is in profit, a trend historically linked to cycle bottoms. ETF inflows and continued accumulation by corporate buyers, including MicroStrategy, have provided structural support.

Technical indicators reflect a market in consolidation, with bearish momentum signals raising concerns about a prolonged bear phase. Analysts remain divided on whether the current range reflects a mid-cycle correction or the start of a larger downturn. Long-term fundamentals, however, continue to support Bitcoin’s value proposition.

Meanwhile, the Tinkerbell Effect—driven by belief rather than fundamentals—has weakened, contributing to recent price declines. Bitcoin’s drop below $66,000 has been attributed to fading optimism and reduced investor sentiment.

Why Did This Happen?

ETF outflows have played a role in Bitcoin’s price action. Reduced consumer interest in crypto, as seen in surveys showing a decline from 17% to 12% in U.S. adoption, further dampens enthusiasm. Strong U.S. jobs data has also drawn capital away from risk assets like Bitcoin.

Institutional demand, however, has remained resilient. Goldman Sachs recently revealed $2.36 billion in crypto holdings, with $1.1 billion in Bitcoin and $1 billion in Ethereum. This level of exposure signals growing institutional confidence and could influence market dynamics by boosting price appreciation.

How Did Markets React?

Bitcoin ETF inflows remained robust on February 9, with $145 million flowing into Bitcoin alone. Ethereum and XRP also saw net inflows of $57.05 million and $6.31 million, respectively. These inflows suggest traditional investors continue to favor blue-chip cryptocurrencies.

Crypto ETPs, however, recorded $187 million in outflows last week, though the pace of selling has slowed compared to earlier weeks. Bitcoin’s price fluctuated sharply during the period, dipping to $60,000 before recovering to $68,000 within 15 hours.

Bitcoin mining operations faced challenges during a U.S. winter storm, forcing miners to curtail production to prevent grid instability. Daily output from public miners dropped from 70–90 BTC to 30–40 BTC during the storm.

The Bitcoin network’s hashrate has since partially recovered to around 854 exahashes per second, rebounding after a 40% drop during the storm. Regulatory actions in China and Russia also contributed to earlier hashrate declines. Despite Bitcoin’s 26% price decline in the past month, the network’s resilience signals miner confidence in future price recovery.

What Are Analysts Watching Next?

Bitcoin miners are diversifying strategies to remain profitable, with some pivoting to AI and high-performance computing services. The mining difficulty adjustment is expected to occur around February 20, potentially affecting network profitability.

Bitcoin’s price remains volatile, but ETF inflows and institutional confidence provide a counterbalance to market uncertainty. Corporate accumulation and public miner activity suggest Bitcoin’s long-term fundamentals are intact, though near-term volatility is likely to persist. As market analysis indicates.