Data on the chain suggests that the Bitcoin MPI indicator has recently seen a rise and is now reaching the same values as March 2021. A past pattern may indicate that a bull rally could follow here.
Bitcoin MPI appears to be on an upward trend after months of inactivity
As explained by an analyst in a CryptoQuant afterThe current trend of BTC MPI statistic could suggest that a bull rally could happen soon, if historical pattern hangs slightly.
The “Miners’ Position Index” (or MPI for short) is an indicator defined as the ratio of the number of outflows of all Bitcoin miners divided by their 365-day moving average.
In simpler terms, what this stat is telling us is how miners’ sales behavior is today compared to the past year’s average.
When the value of this indicator rises, it means that miners are selling more BTC recently. On the other hand, the declining value of the index means that miners become less active because they move a smaller number of coins.
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Here is a chart showing the trend in the BTC MPI over the past few years:
It seems that the value of the indicator has been increasing lately | Source: CryptoQuant
As you can see in the chart above, the quant has highlighted three key trend areas for the Bitcoin MPI since 2018.
It seems that in each of these regions, the index made a U-shaped curve with the value of the metric falling as the bull period ended and rising as another rally approached.
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For many months now, the BTC MPI has been in the middle (bear) region of such a curve. But now it seems that the value of the indicator is on an upward trend again and has now reached the same values as it was in March last year.
If the historical pattern holds again this time around, the current trending could lead to the start of another bull rally.
At the time of writing, Bitcoin’s price is hovering around $38.8k, up 0.5% over the past seven days. Over the past month, the cryptocurrency has fallen 8% in value.
The chart below shows the trend in the price of the coin over the past five days.
The price of BTC seems to have moved sideways in recent days | Source: BTCUSD on TradingView
Since the sharp move up and down nearly a week ago, there has been no significant volatility in Bitcoin’s price.
Featured image from Unsplash.com, Charts from TradingView.com, CryptoQuant.com