On-chain data shows the Bitcoin Miners’ Position Index (MPI) has formed a death cross recently, a sign that the asset’s rally may end.
Bitcoin MPI Has Formed A Bearish Crossover Recently
As pointed out by an analyst in a CryptoQuant Quicktake post, the 365-day moving average (MA) of the BTC MPI has crossed above the 90-day recently. The “MPI” here refers to an indicator that measures the ratio between the miner outflows and the yearly MA.
The “miner outflows” are the amounts these chain validators transfer out of their combined wallets. Generally, the miners take out their coins for selling purposes, so the miners outflows can measure how much dumping they are currently partaking in.
Miner outflows are usually not that unusual, though, as this cohort has to constantly sell what they mine to pay off their running costs like electricity bills. What can be notable, however, is whether their selling deviates from the norm.
The MPI provides us with information about precisely this since it compares the outflows against their 365-day MA. When the metric is greater than 0, the miners are selling more than the average for the past year, while negative values imply the opposite.
Now, here is a chart that shows the trend in the 90-day and 365-day MAs of the Bitcoin MPI over the last few years:
The two MAs of the metric appear to have crossed the path of each other in recent days | Source: CryptoQuant
The above graph shows that the 90-day MA Bitcoin MPI (colored in orange) has declined during the last few weeks. Recently, the metric crossed below the 365-day MA, consolidating sideways.
Historically, the crosses of the two MAs of the BTC MPI have appeared to be significant for the cryptocurrency’s price. In the chart, the quant has highlighted the major crossovers that occurred during the last few years.
Whenever the indicator’s 90-day MA has observed a cross above the 365-day MA, BTC has gone off to witness some bullish momentum. Such a cross preceded the April 2019 rally, the 2021 bull run, and the rally that started this January.
On the other hand, the opposite type of cross has proven to be bearish for the asset’s value, as steep declines have followed it. Since this death cross has once again formed for Bitcoin recently, it may signal that this year’s rally has reached its conclusion.
However, the crossover is still in the process of forming, meaning that the coming weeks may be important. If the 90-day MA…
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