According to on-chain analytics firm Glassnode, Bitcoin is poised to conclude 2023 much as it began the year, with significant gains in October.
The latest issue of their weekly newsletter, “The Week On-Chain,” released on October 24, highlighted that the past week has set the stage for a potential uptrend in BTC’s price.
Bitcoin’s price surged to $35,200 during the week, surpassing several crucial trendlines that had previously acted as support for months.
These included various moving averages (MAs), notably the 200-week simple MA at $28,400, which is often considered a critical support level during bear markets.
Glassnode pointed out, “A cluster of long-term simple moving averages of price are located around $28k, and have provided market resistance through September and October.”
However, the recent market strength allowed Bitcoin to break through the 111-day, 200-day, and 200-week averages convincingly.
This breakthrough had a positive impact on the profitability of various investor groups, including speculators and newcomers, whose cost basis was around $28,000.
The Short-Term Holder (STH) cost basis also reached $28k, resulting in an average profit of approximately +20%.
Glassnode presented a chart of the short-term holder market-value-to-realized-value (STH-MVRV) ratio, which measures the profitability of STH coins.
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They noted that even before the October surge, there was no significant capitulation behavior among STH holders.
In contrast to previous years when STH-MVRV experienced deep corrections of -20% or more, the August sell-off only reached -10%, suggesting robust support and potentially paving the way for the recent rally.
Despite facing their own profitability challenges, long-term holders (LTHs) now own over 75% of the available BTC supply for the first time.
Their cost basis is lower, closer to $20,000, and while some believe Bitcoin could return to that level, Glassnode remains optimistic about the year-end outlook.
Glassnode 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.”
As per data from on-chain monitoring resource CoinGlass, BTC/USD has seen a 26% increase this month, which, by October standards, is considered relatively modest.
However, Glassnode’s analysis suggests a positive outlook for Bitcoin as it closes out the year.
