On-chain analytics firm Santiment has explained how this could be the signal that leads to the next bull run for Bitcoin.
Bitcoin Miner Supply Could Be Key To The Start Of The Next Bull Rally
In a new after On X, the analysis agency Santiment has identified the trend in the “Supply in the hands of miners” metric. As the name suggests, this indicator measures the total amount of supply currently held in wallets connected to Bitcoin miners.
When the value of this metric increases, miners receive a net amount of tokens in their wallets. Miners naturally receive coins to their addresses constantly as they solve blocks and receive rewards, so inflows are nothing special to them.
However, net inflows can be something to watch out for when they occur on a large scale and last for a significant period of time. Such a trend is consistent with To cling of these chain validators, which can be positive for the price.
On the other hand, if the indicator registers a drop, it means that miners are withdrawing a net amount of coins from their wallets, possibly to participate in the sale.
Below is a chart showing the trend in Bitcoin supply from Miners over the past few months:
The value of the metric appears to have been declining for a while now | Source: Santiment on X
As can be seen from the chart above, the Bitcoin supply of miners has been on a downward trend since April. This suggests that this group is continuously withdrawing coins from their wallets.
As mentioned earlier, miners can perform outflow transactions to sell, but generally this does not affect the price of the cryptocurrency.
Miners have historically been frequent sellers because they need capital, such as electricity bills, to pay their running costs. However, the size of their sales is usually small enough that the market can easily absorb it.
However, the sell-off they have been experiencing over the past few months has been quite persistent and could even be one of the reasons why the assets have been stuck in consolidation during this period.
What prompted miners to become net sellers is likely the answer: fourth Halvingwhich took place in April and permanently halved the Bitcoin block subsidy, drastically affecting miners’ finances.
Since the event, miners have been under pressure and the overall downtrend that BTC is experiencing has only worsened their situation, forcing them to continue selling.
Santiment notes that a reversal in miner supply could be worth watching, as it would suggest that miners have felt comfortable enough to accumulate again and that this would serve as “a strong signal that the next bull run is approaching.”
BTC price
At the time of writing, Bitcoin price is trading at around $58,200, up 6% over the past week.
Looks like the price of the coin has been going up over the last few days | Source: BTCUSDT on TradingView
Main image from Dall-E, Santiment.net, chart from TradingView.com