The on-chain analytics firm Santiment has explained how this could be the signal that leads into the next bull run for Bitcoin.
Bitcoin Miner Supply May Hold Key To Start Of Next Bull Rally
In a new post on X, the analytics firm Santiment has discussed the trend in the “Supply held by Miners” metric. As its name suggests, this indicator measures the total amount of supply currently sitting in the wallets connected to the Bitcoin miners.
When the value of this metric rises, the miners receive a net number of tokens in their wallets. Miners naturally constantly receive coins into their addresses as they solve blocks and receive rewards, so inflows for them aren’t anything special.
Net inflows, however, can be something to note when they occur on large scales and last for some significant period. Such a trend corresponds to HODLing from these chain validators, which can be bullish for the price.
On the other hand, the indicator registering a decline implies the miners are transferring a net number of coins out of their wallets, potentially to participate in selling.
Now, here is a chart that shows the trend in the Bitcoin Supply held by Miners over the last few months:
The value of the metric appears to have been declining for a while now | Source: Santiment on X
As displayed in the above graph, the Bitcoin Supply held by Miners has been following a downward trajectory since around April, suggesting that this cohort has constantly been moving coins out of their wallets.
As mentioned earlier, miners may make outflow transactions for selling, but generally, this doesn’t affect the cryptocurrency’s price.
Miners are historically regular sellers because they need capital, like electricity bills, to pay off their running costs. Still, the scale of their selling is usually small enough that the market can readily absorb it.
However, The selloff they have displayed in the last few months has been quite persistent and may even be one of the reasons why the asset has been stuck in consolidation during this period.
As for what spurred the miners into becoming net sellers, the answer is likely to be the fourth Halving, which occurred in April and permanently slashed the Bitcoin block subsidy in half, thus causing a drastic effect on miner finances.
Miners have been under pressure since the event, and the overall bearish trajectory being followed by BTC has only been making their situation worse, forcing them to continue to sell.
Santiment notes that a reversal in the Supply held by Miners could be one to watch, as it would suggest the miners have become comfortable enough to accumulate again and act as “a strong signal the next bull run is approaching.”
BTC Price
At the time of writing, Bitcoin is trading at around $58,200, up 6% over the last week.
Looks like the price of the coin has been going up over the last few days | Source: BTCUSDT on TradingView