Recent on-chain data indicates that the Bitcoin Miners’ Position Index (MPI) has shown a crossover that historically has been a positive signal for the price of the asset.
Bitcoin MPI Signals Bullish Momentum as 90-Day MA Surpasses 365-Day
According to analysis in a CryptoQuant Quicktake post, the Bitcoin MPI momentum has signaled a bullish trend for Bitcoin. The MPI, which tracks the ratio between the total miner outflow and its 365-day moving average (MA), is a key metric in assessing market dynamics.
Miner outflow represents the amount of cryptocurrency (in USD) being moved out of wallets associated with the network’s validators. A higher MPI value suggests increased outflows by miners, often signaling selling activities that could impact the asset’s price negatively.
Conversely, a lower MPI value indicates miners are withdrawing fewer coins than the yearly average, possibly indicating a preference for holding assets at the moment.
While the Bitcoin MPI itself is not the focus, the derivative indicator known as MPI Momentum, involving 90-day and 365-day MAs, is essential for identifying market trends.
Displayed below is a chart showing the BTC MPI Momentum over the previous years, indicating the recent crossover of the 90-day MA surpassing the 365-day MA, highlighting a positive momentum in miner selling.
Historically, Bitcoin has experienced bullish periods following such crossovers, as seen in previous instances before the latest occurrence in December 2022. The continued divergence of the 90-day and 365-day MAs implies the current momentum remains strong.
Typically, Bitcoin reaches its peak when the 90-day MA significantly outpaces the 365-day MA. With the current trend, there may still be room for further growth in the cycle before a potential top due to miner selloffs.
Bitcoin Price Movement
Following a recent dip to $98,000 during a market correction, Bitcoin has rebounded to $102,500, showcasing resilience in the face of volatility.
