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Intro to On-Chain
Background Knowledge
Exchange Flows/Indicators
Miner Flows/Indicators
UTXO Data/Indicators
Market Data/Indicators
Network Indicators
Stablecoin Exchange Flows/Indicators
Fund data & Premium
Miners' Position Index (MPI)
Miners' Position Index (MPI) is defined as the ratio of the number of all miners' outflows in USD divided by 365 days moving average of it.
Definition
Miners' Position Index (MPI) is defined as the ratio of the number of all miners' outflows in USD divided by 365 days moving average of it. This indicator is inspired by Puell Multiple.
Interpretation
By value itself
- High : Miners are sending their coins more than usual- Bearish
- Low : Miners are sending their coins less than usual - Bullish
By examining trend
- Increasing : Miners are being more involved in selling and increasing their sell - Bearish
- Decreasing : Miners are being less involved in selling and decreasing their sell - Bullish
Unlike Miner outflows, Miners' Position Index (MPI) takes the average behavior of miners into account by using 365 days moving average. Also, MPI explains the relative miner's liquidation behavior compared to the historical average, assuming that most of the outflows from miners are heading to exchanges for selling. Also assuming that miners are good at selling their positions at the right time as professional traders, MPI is a good indicator for timing exit points (selling) by duplicating their behaviors. This also helps to view miners' profitability along with Puell Multiple.
Use Case
Spotting Exit Points for Selling
Given the interpretation that MPI helps us to spot selling points, we can benefit from the events where the large MPI values occur. In this use case, we utilize one of the well-known technical indicators called Bollinger-band to detect abnormal MPI values. The below chart illustrates detected spots to exit from the market, selling.
