In its weekly newsletter titled "A Week on Chain," on-chain analytics firm Glassnode has expressed its anticipation of Bitcoin's October gains approaching nearly 30% by the end of 2023. Researchers are of the opinion that the past week has paved the way for an upward trajectory in Bitcoin's price. The cryptocurrency surpassed several crucial trend lines when it briefly touched $35,200, many of which had previously served as support levels during the prior months. These included a variety of moving averages, such as the 200-week simple moving average at $28,400, which is traditionally seen as a "bear market" support line.
Glassnode reported, "A series of long-term simple moving average prices sit around $28,000 and provided market resistance in September and October." It continued to highlight that bulls demonstrated their strength this week by convincingly breaking above the 111-day, 200-day, and 200-week moving averages, subsequently leading to a significant increase in profitability for various investor groups. This achievement also brings the cost basis for speculators and recent market entrants closer to $28,000.
The report also touched on the short-term holder (STH) cost basis, which has now reached $28,000, resulting in the average profit for near-term investors being around +20%. The researchers included a chart of the short-term holder market value to realized value (STH-MVRV) ratio, emphasizing that there was no notable capitulation even before the October rally. Despite facing its own profitability challenges, long-term holders (LTH) now hold over three-quarters of the available BTC supply for the first time.
The cost basis for LTH is gradually moving towards $20,000. While some speculate that Bitcoin might still revisit this level, Glassnode appears optimistic about the year-end performance. 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 is likely to be anchored, so the coming weeks will be worth watching closely." According to data from on-chain monitoring resource CoinGlass, BTC/USD has risen by 26% this month, which, though significant, is still relatively moderate compared to past Octobers.
