Bitcoin’s price gains in October, reaching a remarkable 26%, have set the stage for a potential resumption of its 2023 uptrend, according to analysis from Glassnode.
The cryptocurrency has successfully navigated past crucial resistance levels, enhancing profitability for various investor cohorts and laying a foundation for future growth.
Bitcoin Bounces Back: A Technical Triumph and Uptrend on the Horizon
Bitcoin has staged an impressive recovery, gaining 26% in October, a performance that Glassnode’s latest analysis suggests could be the precursor for a renewed uptrend as we approach the end of 2023. The on-chain analytics firm has meticulously examined the market movements, highlighting that the cryptocurrency is poised for an optimistic trajectory.
Breaking Boundaries: Bitcoin Surpasses Key Resistance Levels
In its latest “Week On-Chain” newsletter, released on October 24, Glassnode’s researchers delved deep into Bitcoin‘s performance, noting that the cryptocurrency has “convincingly” surpassed numerous critical trendlines, which had been robust support levels for several months. Among these were various moving averages, with the 200-week simple moving average at $28,400 standing out as a classic “bear market” support line.
In the words of Glassnode,
“A CLUSTER OF LONG-TERM SIMPLE MOVING AVERAGES OF PRICE ARE LOCATED AROUND $28K, AND HAVE PROVIDED MARKET RESISTANCE THROUGH SEPTEMBER AND OCTOBER.”
The firm elaborated, stating,
“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.”
This breakthrough has led to a notable improvement in the profitability of various investor cohorts. Additionally, the cost basis for speculators and newer market participants is also situated near the $28,000 mark. Glassnode further noted,
“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%.”
Laying the Groundwork for Future Gains
The researchers have presented data on the short-term holder market-value-to-realized-value (STH-MVRV) ratio, showcasing that even before the October surge, there were no significant signs of capitulatory behavior. The analysis suggests that the relatively shallow MVRV decline observed in August was an indicator of strong market support, acting as a precursor to the recent rally.
As the analysis unfolds, it becomes evident that the current market conditions, characterized by a low presence of STH entities and a predominant ownership of Bitcoin by long-term holders (LTHs), sets a unique stage for the cryptocurrency. Glassnode concludes,
“A MEANINGFUL PROPORTION OF SUPPLY AND INVESTORS NOW FIND THEMSELVES ABOVE THE AVERAGE BREAK-EVEN PRICE, LOCATED AROUND $28K.”
The firm believes that this development has laid the groundwork for a resumption of the 2023 uptrend, making the weeks to come crucial for investors and market observers alike.
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