header banner
Default

After a 26% increase in price in October, research indicates that Bitcoin is set to resume its 2023 uptrend


Bitcoin (BTC) is due to finish 2023 as it started, on-chain analytics firm Glassnode said, as October gains near 30%.

In the latest edition of its weekly newsletter, “The Week On-Chain,” released Oct. 24, researchers argued that the past week “sets the foundation” for a BTC price uptrend.

BTC price “convincingly” beats out resistance levels

VIDEO:

As it hit $35,200 this week, Bitcoin eclipsed various key trendlines, which had previously acted as support for months.

These included various moving averages (MA), among them the 200-week simple MA at $28,400 — the classic “bear market” support line.

“A cluster of long-term simple moving averages of price are located around $28k, and have provided market resistance through September and October,” Glassnode noted.

“After a month of the market grinding higher, the bulls found sufficient strength this week to convincingly break through the 111-day, 200-day, and 200-week averages.”
fd156af3-f844-4fed-8f94-1118ed6f2b4f
BTC/USD annotated chart with moving average data (screenshot). Source: Glassnode

In so doing, the profitability of various investor cohorts improved considerably. The so-called cost basis of speculators and market newcomers also lies near $28,000.

“The Short-Term Holder (STH) cost basis is also now in the rear view mirror at $28k, putting the average recent investor into an average profit of +20%,” “The Week On-Chain” continued.

Researchers uploaded a chart of the short-term holder market-value-to-realized-value (STH-MVRV) ratio, which tracks the profitability of STH coins. They noted that even prior to the October upside, no major capitulatory behavior was visible.

“We can see instances in 2021-22 where STH-MVRV reached relatively deep corrections of -20% or more,” they explained.

“Whilst the August sell-off did reach a low of -10%, it is noteworthy how shallow this MVRV decline is by comparison, suggesting the recent correction found noteworthy support, being a precursor to this week’s rally.”
31ffdf3e-8e5c-4b5b-8bbf-6e767ecc6065
Bitcoin STH-MVRV annotated chart (screenshot). Source: Glassnode

Bitcoin “sets the foundation” for green year

VIDEO:

As Cointelegraph reported, the presence of STH entities versus their seasoned counterparts, the long-term holders (LTHs), is now historically low.

Related: Bitcoin price model expects $45K ‘phase’ to hit in November

Despite facing profitability issues of their own, LTHs now own more than three-quarters of the available BTC supply for the first time.

Their cost basis is lower, further toward $20,000 — and while some believe that Bitcoin could still return to that area, Glassnode is optimistic over how the year will end.

“A meaningful proportion of supply and investors now find themselves above the average break-even price, located around $28k,” it concluded.

“This sets the foundation for a resumption of the 2023 uptrend. At the very least, the market has crossed over several key levels where aggregate investor psychology is likely to be anchored, making the weeks that follow important to keep an eye on.”
4a576b99-dd00-497e-841f-8c8f63b8851e
BTC/USD monthly returns (screenshot). Source: CoinGlass

Per data from on-chain monitoring resource CoinGlass, BTC/USD is currently up 26% this month — by October standards, still relatively modest.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

Sources


Article information

Author: Christopher Moore

Last Updated: 1699515243

Views: 824

Rating: 3.7 / 5 (68 voted)

Reviews: 88% of readers found this page helpful

Author information

Name: Christopher Moore

Birthday: 2018-01-28

Address: 2232 Jeremiah Points, South Vanessa, TN 89270

Phone: +3972678168901853

Job: Phlebotomist

Hobby: Survival Skills, Wine Tasting, Skateboarding, Role-Playing Games, Mountain Climbing, Cycling, Horseback Riding

Introduction: My name is Christopher Moore, I am a resolute, dear, capable, fearless, forthright, talented, resolved person who loves writing and wants to share my knowledge and understanding with you.