On-chain data shows the Bitcoin MPI has surged to its highest value since the April of this year, a sign that may prove to be bearish for the crypto’s price.
Bitcoin Miners’ Position Index Has Spiked Up During Past Day
As pointed out by an analyst in a CryptoQuant post, this instance is the fifth time that the metric has sent a warning signal.
The “Miners’ Position Index” (or the MPI in short) is an indicator that measures the ratio between the miner outflows in USD, and the 365-day moving average of the same.
Generally, miners transfer coins out of their wallets (that is, make outflow transactions) for selling purposes. Thus, the MPI can tell us whether miners are selling more or less right now compared to their past year average.
When the value of this metric is high, it means miners are dumping more than usual currently. On the other hand, low values suggest these chain validators aren’t doing any heavy selling at the moment.
Now, here is a chart that shows the trend in the Bitcoin MPI over the past year and a half:
The value of the metric seems to have been pretty high recently | Source: CryptoQuant
As you can see in the above graph, whenever the Bitcoin Miners’ Position Index has crossed above a value of 2 during the past year, the price of the crypto has seen a decline shortly after.
There have been five such spikes in 2022 so far, the latest of which has only just been recorded in the last 24 hours.
This current surge has now taken the indicator’s value to the highest level since the spike back in April of this year.
When this previous spike was seen, Bitcoin was above $45k, but only a week later the crypto had crashed below $40k.
If the latest rise in miner selling also follows the same trend as back in April, then BTC may observe some downtrend in the coming days.
BTC Price
At the time of writing, Bitcoin’s price floats around $16.9k, up 3% in the last week. Over the past month, the crypto has lost 17% in value.
Below is a chart that shows the trend in the price of the coin over the last five days.
Looks like the price of the crypto has retreaded below the $17k level again | Source: BTCUSD on TradingView
Bitcoin has surged up in the last few days, but it’s unclear whether this rise will last, given the recent increased selling pressure from the miners.
Featured image from Hans-Jurgen Mager on Unsplash.com, charts from TradingView.com, CryptoQuant.com
On-chain data suggests the Bitcoin MPI indicator has observed a rise recently, now reaching the same values as March 2021. Past pattern may hint that a bull rally could follow here.
Bitcoin MPI Seems To Be Catching Some Uptrend After Months Of Inactivity
As explained by an analyst in a CryptoQuant post, the BTC MPI metric’s current trend may suggest that a bull rally could occur soon, if historical pattern is anything to go by.
The “Miners’ Position Index” (or the MPI in short) is an indicator that’s defined as the ratio of the number of all Bitcoin miners’ outflows divided by the 365-day moving average of the same.
In simpler terms, what this metric tells us is how the miner selling behavior is right now compared to the average over the past year.
When the value of this indicator rises, it means miners are selling more BTC recently. On the other hand, the index’s value going down implies miners are turning less active as they are moving around a lower amount of coins.
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Now, here is a chart that shows the trend in the BTC MPI over the past few years:
Looks like the value of the indicator has been on the rise recently | Source: CryptoQuant
As you can see in the above graph, the quant has marked three important regions of trend for the Bitcoin MPI since 2018.
It looks like, in each of these regions the index made a U-shaped curve where the metric’s value fell as the bull period ended and rose as a new rally approached.
Related Reading | Bitcoin On Course To Hit $100K Nine Months From Now, Bitbull CEO Predicts
For many months now, the BTC MPI has been in the middle (bear) region of such a curve. But now, it looks like the indicator’s value is catching an uptrend again, and has now reached the same values as observed back in March of last year.
If the historical pattern will hold true this time as well, then the current trend formation may be leading towards the start of a new bull rally.
BTC Price
At the time of writing, Bitcoin’s price floats around $38.8k, up 0.5% in the last seven days. Over the past month, the crypto has lost 8% in value.
The below chart shows the trend in the price of the coin over the last five days.
BTC's price seems to have been trending sideways over the last few days | Source: BTCUSD on TradingView
Since the sharp move up and down almost a week ago, there hasn’t been any significant volatility in the price of Bitcoin.
Featured image from Unsplash.com, charts from TradingView.com, CryptoQuant.com