On-chain analytics firm Santiment has explained how this could be the signal that leads to the next bitcoin bull run.
bitcoin Miner Supply May Be Key to Starting the Next Bullish Rally
In a new x.com/santimentfeed/status/1834464742196609346″ target=”_blank” rel=”noopener nofollow”>mail On day x, analytics firm Santiment analyzed the trend in the “Supply Held by 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. Naturally, miners constantly receive coins to their addresses as they solve blocks and receive rewards, so the inputs for them are nothing special.
However, net inflows can be something worth mentioning when they occur on a large scale and last for a significant period. Such a trend corresponds to asset retention by these on-chain validators, which can be bullish for the price.
On the other hand, the indicator that registers a decrease implies that miners are transferring a net amount of coins from their wallets, potentially to participate in the sale.
Now, here is a chart showing the trend in the supply of bitcoin held by miners over the past few months:
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The value of the metric appears to have been declining for a while now | Source: x.com/santimentfeed/status/1834464742196609346/photo/1" target="_blank" rel="noopener nofollow">Santiment on x
As shown in the chart above, the supply of bitcoin held by miners has been following a downward trajectory since around April, suggesting that this group has been steadily moving coins out of their wallets.
As mentioned above, miners can make exit transactions to sell, but this usually does not affect the price of the cryptocurrency.
Historically, miners are frequent sellers because they need capital, such as electricity bills, to pay their operating expenses. Still, the scale of their sales is usually small enough that the market can easily absorb it.
However, the sell-off they have shown in recent 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 prompted miners to become net sellers, the answer is likely the fourth halving, which occurred in April and permanently halved the bitcoin block subsidy, thus causing a drastic effect on miners' finances.
Miners have been under pressure since the event, and the overall bearish trajectory that btc is following has only worsened their situation, forcing them to continue selling.
Santiment notes that a reversal in supply held by miners could be something to watch out for, as it would suggest that miners have become comfortable enough to accumulate again and act as “a strong signal that the next bull run is approaching.”
btc Price
At the time of writing, bitcoin is trading at around $58,200, up 6% from the past week.
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Looks like the price of the coin has been going up over the last few days | Source: x/s7rYat32/" target="_blank" rel="noopener nofollow">BTCUSDT on TradingView
Featured image by Dall-E, Santiment.net, chart by TradingView.com
