The amount of Bitcoin miners are losing is at its lowest level in 10 years. What impact will this have on its price?

Bitcoin outflows from miners have fallen to a 10-year low, and analysts believe a hoarding mentality may be partly to blame.

According to data from Glassnode, the average total number of bitcoins transferred from miner addresses fell to 987 on Thursday, the lowest level since February 3, 2010. The previous 10-year low of 988 was set on May 23, 2010.

The amount of Bitcoin outflow from miners (7-day average outflow)

The number of coins sent by miners to exchanges is also at its lowest point in more than a year, Glassnode noted in its weekly report.

“This suggests that efficient miners continue to hoard Bitcoin (only selling a portion of BTC),” said Asim Ahmad, co-chief investment officer at Eterna Capital, a London-based blockchain investment firm.

An increase in miners’ holdings doesn’t necessarily have a long-term bullish impact on the cryptocurrency’s price. Miners tend to operate primarily on cash, selling their holdings on an almost daily basis to fund operations.

Therefore, miners hoarding Bitcoin could be described as temporarily delaying selling Bitcoin, perhaps due to concerns that the market lacks the strength to absorb regular supply. Essentially, they could be waiting for the market to perform strongly and prices to rise before they can realize profits.

Therefore, during the next meaningful price rally, the market will likely face a higher-than-normal supply from miners. This in turn could keep a lid on price gains.

Besides hoarding, Ahmed said another major reason for the decline in miner outflows is that less Bitcoin has been mined since the block reward halving in May.

Bitcoin network output chart source: Glassnode

In fact, in the nine days following the Bitcoin network reward halving on May 11, outflows from miner addresses decreased from 2,334 BTC to 1,034 BTC.

The sharp drop in profitability has forced less efficient miners to exit, as evidenced by the drop in hash rate (the total computing power used to mine blocks on the blockchain). In the two weeks following the halving, this figure dropped from 120 TH/s to 90 TH/s, though it is now up as more efficient machines are launched and mining difficulty decreases.

Bitcoin network hash rate chart source: Glassnode

It’s worth noting that if the price of Bitcoin rises significantly, miners who were forced to quit could potentially return to the Bitcoin blockchain network, making older hardware profitable again.

Bitcoin is currently trading little changed on the day near $9,370, according to CoinDesk’s Bitcoin Price Index.

Since mid-May, the cryptocurrency has been largely confined to a narrow range of $9,000 to $10,000. The direction in which this range is breached could set the tone for the next major move.