The first chart shows the annual inflation rate of bitcoin (in blue) versus the price of bitcoin (in black). Bitcoin inflation refers to the new supply of bitcoins that enter the market through mining. This rate gradually decreases due to the Bitcoin Halving mechanism that occurs every four years.
Analysis: the decline in bitcoin's inflation rate has made it a rarer asset, which is one of the main reasons for its long-term price growth. Howings are reducing the supply of new bitcoin, and this shortage of supply, along with the increase in demand (especially from institutional investors), has caused price growth.
The second graph shows the share of the volume of transactions created by miners (in blue) versus the price of bitcoin (in black). Miners play a key role in the Bitcoin network, as they verify transactions and receive new bitcoins through block bonuses.
After this jump, bitcoin prices have fallen, and the share of miner volume has also fallen.
Analysis: the increase in miner volume is usually indicative of more miner activity in the sale of extracted bitcoins. This can be caused by the need for liquidity by miners to cover operating costs (such as electricity and equipment). In late 2024, the sudden jump in miner volume was likely due to miners ' massive bitcoin sales at peak prices, which may have contributed to the price drop in early 2025. This behavior of miners is usually seen in bull markets, where they use high prices to cash in their profits.
The third chart shows the percentage of bitcoin holders in profit (in blue) versus the price of bitcoin (in black). This metric shows how many bitcoin addresses currently have bitcoins that are worth more than their purchase price.
Current position in the market cycle: according to the Data, Bitcoin currently appears to be in the correction phase after a strong bullish market. The fall in prices from 100,000 to 80,000 and the decline in the percentage of holders in profits show that the market is cooling. However, low inflation rates and reduced miner sales pressure could be a sign of a return to upward trends in the near future, especially if demand from institutional investors or retailers increases.
Bitcoin Holders in Profit vs. Price
Source: IntoTheBlock🫡
