Bitcoin (BTC) has struggled below the $70,000 price for more than four months. Until yesterday, even the much-lauded “Uptober” didn’t top it for quite some time.
However, a CryptoQuant analyst projects that the current Miner Position Index (MPI) metric will significantly help Bitcoin’s price rise to incredible heights between the end of this year and next year.
How miners are fueling the next price gain
Bitcoin miners verify new transactions, add them to the network, and create new bitcoins by solving cryptographic problems. Entities interested in operating a mining node must install the necessary equipment for the job.
Historically, Bitcoin miners tend to sell parts of their BTC stash to cover operating costs before the Bitcoin halving occurs. This quadrennial event halves the number of BTC produced in each block. The most recent halving on April 20 saw the block reward drop from 6.25 BTC to 3.125 BTC.
The CryptoQuant analyst explained that miners often hoard and hold BTC instead of selling it whenever the price stalls after the halving event. Recent reports show that prominent miners like Marathon Digital are hoarding as much BTC as possible. The current MPI metric indicates that miners are still holding onto their coins.
Source: CryptoQuant
Explaining the chart, the analyst said:
“Historically, when the MPI recovered from a low, the price of Bitcoin tended to experience significant increases. Therefore, the current situation could also be interpreted as a prelude to an increase in the price of Bitcoin.”
Referring to another on-chain indicator, the analyst explained that block rewards are also increasing due to an increase in on-chain transactions. Ideally, an upward trend in operations on the chain is often accompanied by an increase in the price of the underlying network asset.
BTC shoots above $68,000
While the CryptoQuant analyst expects a new all-time high for bitcoin, it is still unclear when the leading crypto asset will achieve this price increase.
At the time of writing, BTC traded hands at $68,800, representing a slight increase of 1.58% over the past 24 hours.
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