The cryptocurrency's spectacular rally in 2021 drew thousands of entrants into mining, or producing new coin. As a result the hashrate, or combined computational power used by bitcoin miners globally, has roughly quadrupled over the past six months to blow past 200 million "terahashes" per second.

But what's that got to do with the price of bitcoin?

A rising hashrate makes it becomes harder for miners to earn coin and cover their costs of hardware, electricity and staff - so many are more likely to sell, rather than hold, their newly minted cryptocurrency, exerting a bearish force on the market.

"Running costs are a major factor in miners' decision to hold or sell newly acquired coins. They are the first and most natural sellers in the crypto space and so definitely impact prices," said Justin d'Anethan, institutional sales director at crypto financial services firm Amber Group.

The total value of coins held in miners' wallets has fallen to around $75 billion from $114 billion at the start of November, as their profitability has been squeezed by the rising hashrate as well as falling prices, according to Oslo-based crypto research firm Arcane Research.

Miners have been transferring more coins to exchanges than adding to reserves, according to crypto industry analytics firms, a sign of selling or intent to sell.

Such flows are adding to pressures facing bitcoin, whose drift towards the mainstream has seen it caught up in a selloff in global markets driven by tensions on the Ukraine border and the Federal Reserve's policy tightening.

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