On-chain data shows that the Bitcoin MPI has surged to its highest level since April this year, a sign that could prove bearish for the crypto’s price.
Bitcoin miners position index has increased over the past day
As one analyst pointed out in a CryptoQuant post, this is the fifth time the metric has sent a warning signal.
The Miners’ Position Index (or MPI for short) is an indicator that measures the ratio between miner outflows in USD and the 365-day moving average of the same.
Generally, miners transfer coins from their wallets (i.e. perform outflow transactions) to sell them. Thus, the MPI can tell us whether miners are currently selling more or less compared to their average over the past year.
When the value of this metric is high, it means miners are currently dumping more than usual. On the other hand, low values indicate that these chain checkers are not currently making large sales.
Now here is a chart showing the trend of the Bitcoin MPI over the last year and a half:
The value of the metric seems to have been quite high lately | Source: CryptoQuant
As you can see in the chart above, when the Bitcoin miners’ position index surpassed a level of 2 over the past year, the crypto’s price fell shortly after.
So far in 2022 there have been five such spikes, the last of which has just been recorded in the last 24 hours.
This recent surge has now taken the indicator’s reading to its highest level since April’s spike this year.
Bitcoin was above $45,000 when this previous surge was seen, but just a week later the crypto had crashed below $40,000.
If the recent spike in miner sales also follows the same trend as it did in April, then BTC could see some downside in the coming days.
BTC price
At the time of writing, the price of Bitcoin is hovering around $16.9k, up 3% over the past week. Over the past month, the crypto has lost 17% in value.
Below is a chart showing the evolution of the coin’s price over the last five days.
It looks like the price of the crypto has fallen back below the $17,000 level | Source: BTCUSD on TradingView
Bitcoin has surged sharply over the past few days, but it’s unclear if this surge will hold up given recently increased selling pressure from miners.
Featured image by Hans-Jürgen Mager on Unsplash.com, charts by TradingView.com, CryptoQuant.com
Learn Crypto Trading, Yield Farms, Income strategies and more at CrytoAnswers
https://nov.link/cryptoanswers
Comments are closed.