Miner Position Index

The measure depends on knowing which addresses belong to miners. The block subsidy is paid to an address the miner chooses, and that address is visible on the chain, so the receiving side is identifiable. What is not identifiable is where the coins go when they leave. A miner that sends coins to an exchange, to a custody provider, or to another wallet it controls produces the same on-chain movement, and the measure cannot tell the cases apart.

The attribution is also complicated by pooling. A mining pool receives the subsidy and distributes it to its participants, so the coins leaving the pool's address include payments to miners who may have no intention of selling. A large pool payout can therefore register as miner outflow without any sale occurring, which is a structural distortion rather than an occasional one.

The measure also cannot see coins that miners sell through an over-the-counter desk or that are used as collateral rather than sold. Those transactions may not appear as an outflow from a miner address at all, so the measure can understate selling activity as well as overstate it.

The measure is best read as a description of what miners are doing with the coins they receive, with the caveat that the description is incomplete. A high reading is consistent with selling, and it is also consistent with a pool payout or a custody migration. The measure narrows the range of explanations; it does not select one.

The measure is also sensitive to the window used. A one-year range responds quickly to recent changes and can produce extreme readings from ordinary variation. A longer window is more stable and slower to reflect a genuine shift. The choice of window is a definitional decision, and a reading quoted without it is not interpretable.

The mining economics that determine whether miners are under pressure are covered on the mining economics page, and the broader pattern of inference that this measure shares is set out on the limits of blockchain analysis page.