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Bitcoin Restarting 2023 Uptrend After 26% Uptober BTC Price

Bitcoin restarting 2023

According to the on-chain analytics firm Glassnode, Bitcoin (BTC) is poised to conclude 2023 much like it began, with October seeing gains of nearly 30%. In their latest weekly newsletter, “The Week On-Chain,” released on October 24, researchers assert that the past week has laid the groundwork for an upward trend in BTC prices.

Bitcoin broke through several key trendlines, including the 200-week simple moving average (MA) at $28,400, which traditionally served as a support line during bear markets. Glassnode noted that a cluster of long-term simple moving averages of price was situated around $28k, providing market resistance throughout September and October.

After a month of steady upward movement, the bulls exhibited enough strength to convincingly breach the 111-day, 200-day, and 200-week averages.

BTC/USD annotated chart with moving average data (screenshot). Source: Glassnode
BTC/USD annotated chart with moving average data (screenshot). Source: Glassnode

This surge in price led to a significant improvement in the profitability of various investor cohorts. The cost basis for short-term holders (STH) also moved beyond $28k, resulting in an average profit of +20% for recent investors. Glassnode presented a chart of the short-term holder market-value-to-realized-value (STH-MVRV) ratio, indicating that even before the October upswing, there was no prominent capitulatory behavior.

In comparison to previous instances in 2021-22 where STH-MVRV experienced corrections of -20% or more, the August sell-off only reached a low of -10%. This shallow decline in MVRV suggested that the recent correction found substantial support, serving as a precursor to the rally observed in the following week.

Bitcoin STH-MVRV annotated chart (screenshot). Source: Glassnode
Bitcoin STH-MVRV annotated chart (screenshot). Source: Glassnode

Despite facing their own profitability concerns, long-term holders (LTHs) now possess over three-quarters of the available BTC supply for the first time. Their cost basis is lower, closer to $20,000. Although some believe Bitcoin could still return to that range, Glassnode remains optimistic about how the year will conclude.

A significant portion of the supply and investors now find themselves above the average break-even price of around $28k. This paves the way for a resumption of the 2023 uptrend.

At the very least, the market has surpassed several key levels that are likely to anchor aggregate investor psychology, making the upcoming weeks crucial to monitor.

BTC/USD monthly returns (screenshot). Source: CoinGlass
BTC/USD monthly returns (screenshot). Source: CoinGlass

According to data from on-chain monitoring resource CoinGlass, BTC/USD has seen a 26% increase this month, which, by October standards, is still relatively modest.

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