According to on-chain data, the Bitcoin Miners’ Position Index (MPI) has recently formed a crossover, a development that has historically been a bullish indicator for the cryptocurrency’s price.
The Bitcoin MPI, an on-chain metric that monitors the ratio between the total miner outflow and its 365-day moving average (MA), has seen its 90-day MA cross above the 365-day MA. This development was outlined in a CryptoQuant Quicktake post, and it indicates an uptick in the momentum of miner selling.
Miner outflow refers to the amount of cryptocurrency, measured in USD, being transferred out of the wallets linked to the network’s validators. A high MPI value signifies an increase in miner outflows, which typically occurs when miners sell their tokens. This selling trend can potentially be bearish for Bitcoin’s price.
Conversely, a low MPI value suggests miners are withdrawing fewer coins than the average for the past year. This could indicate that miners are choosing to hold onto their tokens, a trend that could be bullish for Bitcoin.
The MPI Momentum, a derivative indicator of the Bitcoin MPI, has gained interest for its recent bullish signal. This metric utilizes two MAs: the 90-day and the 365-day. A chart showcasing the BTC MPI Momentum over the past few years shows the 90-day MA recently breaking above the 365-day MA, suggesting an increase in positive momentum for miner selling.
While an uptick in selling might initially seem negative, Bitcoin’s price has historically benefited from this pattern. The chart illustrates that this crossover typically marks the beginning of a prolonged bullish period for Bitcoin. The last time the two MAs displayed this trend before the most recent occurrence was in December 2022.
Since the most recent crossover, the 90-day and 365-day MAs have continued to diverge, indicating sustained strength in the metric’s momentum. Bitcoin has generally only peaked when the 90-day MA has significantly outpaced the 365-day MA. Based on the current positions of these two lines, it’s possible that Bitcoin still has room to grow in this cycle before miner selling triggers a peak.
Despite a recent downturn where Bitcoin fell towards the $98,000 mark, the cryptocurrency appears to have rebounded, now trading back at around $102,500. This development comes amidst the MPI’s bullish momentum, potentially indicating a promising future for Bitcoin’s price.
