Bitcoin MPI Crossover Could Suggest Bull Run Still On

On-chain data shows the Bitcoin Miners’ Position Index (MPI) has recently formed a crossover that has historically been bullish for the asset’s price.

As explained by an analyst in a CryptoQuant Quicktake post, the Bitcoin MPI momentum has recently given a bullish signal for Bitcoin. The “MPI” refers to an on-chain metric that keeps track of the ratio between the total miner outflow and its 365-day moving average (MA).

The miner outflow here is naturally the amount of the cryptocurrency (in USD) that is being transferred out of the wallets associated with the network’s validators.

When the value of the MPI is high, it means the miners are making more outflows than usual. Generally, the main reason why this cohort transfers tokens out of its wallets is for selling-related purposes, so this kind of trend can be bearish for the asset’s price.

On the other hand, the indicator being low suggests the miners are withdrawing a lower number of coins than the average for the past year. Such a trend could be a sign that this group is preferring to hold for now.

In the context of the current topic, the Bitcoin MPI itself isn’t of interest, but rather a derivative indicator known as the MPI Momentum. Like other momentum metrics, this one also involves two MAs: 90-day and 365-day.

Below is a chart for the BTC MPI Momentum over the past few years.

As displayed in the graph, the 90-day MA of the Bitcoin MPI recently broke above the 365-day one. This suggests miner selling has been gaining positive momentum.

While this may sound bad, the cryptocurrency has actually historically benefited from the pattern. From the chart, it’s apparent that the crossover generally signals the start of an extended bullish period for the asset’s price. The last time that the two MAs of the MPI displayed this trend before the latest instance was back in December 2022.

So far since the most recent crossover, the 90-day and 365-day MAs have continued to diverge away from each other, implying that the momentum in the metric remains strong.

Bitcoin has usually only hit tops when the 90-day has gained a large amount of distance over the 365-day. Thus, considering the current placement of the two lines, it’s possible that the cryptocurrency has some room remaining in this cycle, before miner selloff leads to a top.

Bitcoin fell towards the $98,000 mark during yesterday’s crash, but the asset appears to have found a rebound since then as it’s now back at $102,500.