Bitcoin Miner Volume Has Plunged: What Does It Mean?

As displayed in the graph, the Bitcoin Miners Volume Share briefly rose beyond the 20% mark last year when BTC observed its Q1 rally. This suggests the miners were moving around large amounts on the blockchain, potentially to take advantage of the profit-taking opportunity that the run offered.

Since this peak, though, the indicator‘s value has been going down. There was a temporary deviation towards the end of last year when BTC witnessed its new bull rally, which once again implied the miners were looking to cash in. The selloff lasting only briefly could suggest the miners ran out of coins to sell. Another potential interpretation of the trend, however, could be that it’s rather an increase in activity across the network that has forced Miners Volume Share to shrink.

From the chart, its visible that the pattern has been observed in past bull markets as well, which adds credence to the fact that it may be the transaction volume uplift caused by the fresh capital inflows that tend to take place in such periods that are responsible for the trend.

It‘s also apparent, though, that the metric’s peak has been getting lower with each cycle. The reason behind this may be that the block subsidy, which miners receive as compensation for solving blocks and makes up for the bulk of their income, gets halved each cycle during an event known as the Halving.

Miners earning less naturally means that they also have a lower amount of capital to shift around on the network, which would show up on their share of the transaction volume.

Bitcoin Miners‘ Volume Share has now plunged under the 5% mark, meaning that it has fallen lower than the bottom of the 2017 cycle. Though, it’s still yet to reach the same low as during the 2021 bull market.

BTC Price

Bitcoin has extended its losses by another 2% in the past day as its price has dropped to the $93,700 level.

Looks like the price of the coin has been going down over the last few days.