The Miner’s Position Index (MPI) is an indicator created by CQ.Live that analyses miner outflows to determine their behaviour. An index value above 2 indicates most miners are selling.
The index is calculated as the ratio of an amount of all miners outflows in US Dollar terms divided by the 365-day moving average of outflows in USD. The MPI is similar to the Puell Multiple.
The MPI assumes that most of the outflows from miners are heading to exchanges to be sold and estimates the liquidations of miner proceeds compared to this historical average. By analysing the MPI, we can potentially find good exit points for long positions or for entering short positions.
If miners are profitable sellers, then the MPI will highlight when most miners are selling. When the MPI is above 2, then it indicates that most miners are selling and may be a signal to exit longs (or go short).
For instance, the chart below shows the MPI along with the price of bitcoin and it shows that whenever the MPI reaches high values exceeding 2, there is usually a correction in the price of bitcoin. If the MPI remains below 2, then the index indicates that most miners are not selling, but are instead HODLing bitcoin.
When compared with the Puell Multiple, we can better understand the miners perspective of the market and the MPI can be a useful tool when combined with other analyses.