The numerator is coins issued that day multiplied by price; the denominator smooths a year of the same. Values well below 1 mean miners are earning far less than their recent norm, values well above mean an unusually rich period.
It moves for two different reasons, which is worth separating. Price changes move it continuously; a halving cuts the numerator in half overnight while the denominator catches up over a year, producing a mechanical dip that has nothing to do with market conditions.
Like most on-chain cycle indicators it has been fitted to a small number of past cycles, and mining revenue is a shrinking share of a market now dominated by derivatives and institutional flow. Useful as context on miner economics, weak as a timing tool.
Related: miner-capitulation, block-reward, halving, mvrv