Woofun AI reports that Bitcoin holdings within over-the-counter (OTC) addresses associated with mining companies have contracted by approximately 72% since November 2021, a trend tracked by on-chain analyst Axel Adler Jr.

Woofun AI data shows: The quantitative decline is stark: balances fell from a peak of 500,000 BTC to just 139,700 BTC over the subsequent four years. This sustained drawdown reflects the operational reality where mining firms routinely liquidate mined rewards to service debt, upgrade hardware, and cover electricity costs. Such liquidity events are particularly frequent during periods of rising network difficulty or price volatility.

Structurally, this depletion alters market mechanics by reducing the capacity for large-scale OTC sales that historically absorb bid liquidity and dampen price momentum. With miner-linked inventory at multi-year lows, the immediate threat of downward pressure from this specific source is significantly diminished. This creates a potentially more favorable environment for price appreciation, assuming demand remains stable or expands.

Notably, the bullish implication is not absolute, as other entities such as long-term holders and institutional investors still represent relevant sources of overhead supply. While the reduction in miner reserves removes one layer of selling pressure, it does not negate the influence of broader macroeconomic factors or hash rate trends on price discovery.

This 72% reduction marks a significant structural shift in the Bitcoin mining sector’s balance sheet.

However, it should be viewed as one component of a larger analytical framework rather than a standalone indicator. Downside risks remain, necessitating a holistic view of on-chain metrics and evolving economic conditions.