On-chain data reveals that Dogecoin miners have been steadily accumulating the cryptocurrency, potentially signaling future trends for the memecoin based on historical patterns.
In a recent analysis, the on-chain analytics firm Santiment delved into the behavior of miners within different cryptocurrency markets, including Bitcoin and Dogecoin. The focal point of this discussion is the “Supply held by Miners,” an indicator that tracks the total volume of tokens miners retain in their wallets.
An increase in this metric suggests that miners are experiencing net deposits into their wallets, indicating a phase of accumulation. Conversely, a decline points to miners withdrawing tokens, possibly for sale.
Santiment’s analysis highlights that the supply held by Bitcoin miners has been decreasing over the past few months. This trend typically shows a correlation between miner behavior and Bitcoin’s price. According to Santiment, when miners hold onto their coins, it suggests optimism about future price increases, potentially generating positive market momentum. Conversely, large-scale sales by miners can exert downward pressure on prices.
Recently, Bitcoin’s miner supply has been increasing again after hitting low levels, suggesting a new phase of accumulation, which could be bullish for the cryptocurrency.
However, the relationship between miner behavior and price trends differs for meme coins like Dogecoin. Santiment notes that speculative assets often display an inverse relationship between miner actions and price movements, unlike more established cryptocurrencies.
The analysis shows that Dogecoin’s miner supply had significantly decreased in January, followed by a sharp increase in the DOGE/BTC ratio. Over the past few months, Dogecoin miners’ supply has rapidly grown. Given the historical inverse relationship between the supply metric and price, this accumulation might indicate a bearish outlook for Dogecoin.
