On-chain analytics firm Santiment explained that this could be a signal that could lead to Bitcoin's next bull run.
Bitcoin miner supply could be key to start of next bull market
In a new post on X, analytics firm Santiment discussed trends in the “miner held supply” metric. As the name suggests, this metric measures the total supply currently residing in wallets connected to Bitcoin miners.
When the value of this indicator increases, miners receive a certain number of tokens in their wallets. The inflow is not something special for miners, since they naturally receive coins continuously in their addresses every time they solve a block and receive a reward.
However, if the net inflow occurs on a large scale and continues for a significant period of time, it could be something to watch. Such a trend corresponds with HODL from these chain validators and could be bullish for the price.
On the other hand, if the indicator is showing a drop, it means that miners may be moving a certain number of coins from their wallets and participating in a sale.
Below is a graph showing the trend in the amount of Bitcoin supply held by 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 shown in the graph above, the supply of Bitcoin held by miners has been on a downward trend since around April, suggesting that the group is constantly moving coins out of their wallets.
As mentioned above, miners sometimes conduct outflow transactions to sell, but this does not usually affect the price of the cryptocurrency.
Miners have historically sold off regularly because they need capital to pay off operating costs, such as electricity bills. Still, the size of the sale is usually small enough that the market can easily absorb it.
However, the selling pressure over the past few months has been very persistent and may be one of the reasons why the asset has fallen into consolidation during this period.
The cause of miners turning into net sellers is likely the fourth halving, which took place in April, which permanently cut Bitcoin's block subsidy in half, dramatically impacting miners' finances.
Miners have been under pressure since the incident, and the situation has been exacerbated by BTC’s overall bearish trajectory, forcing miners to continue selling.
Santiment notes that the reversal in mining company-held supply could be noteworthy because it suggests miners have gained enough security to start buying again, serving as a “strong signal that the next bull market is on the way.”
BTC Price
At the time of writing, Bitcoin 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
Featured images from Dall-E, Santiment.net, charts from TradingView.com
