On-chain analytics firm Glassnode says Bitcoin (BTC) will end 2023 the same as it started the year, with gains of nearly 30% in October.
In the latest edition of our weekly newsletter, "One week on the chain“,” published on October 24, researchers believe that the past week has “set the stage” for an upward trend in BTC prices.
Bitcoin price “convincingly” breaks through resistance
When Bitcoin hit $35,200 this week, it surpassed various key trend lines that had served as support for months.
These include various moving averages (MAs), including the 200-week simple moving average at $28,400 – a classic “bear market” support line.
“A series of long-term simple moving average prices sit around $28,000 and provided market resistance in September and October,” Glassnode noted.
“After a month of market gains, bulls found enough strength this week to convincingly break above the 111-day, 200-day and 200-week moving averages.”
By doing so, the profitability of various investor groups increases significantly. The so-called cost basis for speculators and market newcomers is also closer to $28,000.
“The short-term holder (STH) cost basis has also now become $28,000, bringing the average profit of recent investors to +20%,” On-Chain Weekly continued.
The researchers uploaded a chart of the short-term holder market value to realized value (STH-MVRV) ratio, which tracks the profitability of the STH token. They noted that even before the October rally, no significant capitulation was seen.
“We could see a relatively deep correction – 20% or more – in STH-MVRV in 2021-22,” they explained.
“While August’s sell-off did reach a low of -10%, it’s worth noting that the decline in MVRV was very small in comparison, suggesting that the recent correction found noteworthy support for this week’s rebound harbinger of.”
Bitcoin “lays the foundation” for a green year
As Cointelegraph reported, the presence of STH entities, known as long-term holders (LTH), is currently at an all-time low compared to its more experienced peers.
RELATED: Bitcoin price model predicts November ‘stage’ of $45,000
Despite facing its own monetization issues, LTH now holds more than three-quarters of the available BTC supply for the first time.
Their cost basis is lower, moving further towards $20,000 – and while some believe Bitcoin could still return to this area, Glassnode is optimistic about ending the year.
“A large portion of supply and investors now find themselves with average breakeven prices above around $28,000,” the report concluded.
“This sets the stage for a resumption of the uptrend in 2023. At the very least, the market has crossed several key levels where overall investor psychology may be anchored, so the coming weeks will be worth watching closely.”
Every data According to data from on-chain monitoring resource CoinGlass, BTC/USD is up 26% this month — still relatively modest by October standards.
This article does not contain investment advice or recommendations. Every investment and trading activity involves risks, and readers should do their own research when making decisions.
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