On-chain data shows that the Bitcoin MPI has surged to its highest value since April this year, a sign that may prove bearish for the price of the crypto.
The Bitcoin Miners position index has risen in the past day
As noted by an analyst in a CryptoQuant afterthis is the fifth time the metric has sent a warning signal.
The “Position index of miners(or MPI for short) is an indicator that measures the ratio of USD miner outflows to their 365-day rolling average.
In general, miners extract coins from their wallets (that is, create outflow transactions) for sales purposes. For example, 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 statistic is high, it means that miners are currently dumping more than usual. On the other hand, low values suggest that these chain validators are not making heavy sales right now.
Here is a chart showing 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 chart above, when the Bitcoin Miners’ Position Index moved above a value of 2 in the past year, the price of the crypto fell shortly after.
There have been five such peaks in 2022 so far, the last of which has only been recorded in the last 24 hours.
This surge has now pushed the value of the indicator to its highest level since its peak in April this year.
When this previous spike was seen, Bitcoin was above $45,000, but just a week later, the crypto had crashed below $40,000.
If the latest increase in miner sales also follows the same trend as in April, then BTC could see a downward trend in the coming days.
BTC price
At the moment of writing, The price of Bitcoin floating 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 trend in the coin’s price over the past five days.
Looks like the price of the crypto has retreaded below the $17k level again | Source: BTCUSD on TradingView
Bitcoin has surged in recent days, but it is unclear whether this rise will continue given the recent increased selling pressure from the miners.
Featured image from Hans-Jurgen Mager on Unsplash.com, charts from TradingView.com, CryptoQuant.com