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#Bitcoin quotes have reached their highest point since the beginning of the year, breaking key barriers around $28,000, both from a technical (200D MA, 200W MA) and on-chain perspective (coin "cost basis"). This analysis comes from #Glassnode
The breakthrough of these levels has shifted a significant portion of the supply into a positive position, forming the foundation for a renewed upward trend in 2023. These surpassed metrics will serve as crucial benchmarks in the coming weeks, as explained by specialists.
The technical analysis of digital gold is depicted below. The following chart illustrates Bitcoin's price dynamics, along with the True Market Mean Price indicator developed in collaboration with ARK Invest ($29,820).
This indicator reflects the average price at which the last transactions took place, including those that changed hands within a specific timeframe. Historically, Bitcoin has traded half of its "life" above this level and the other half below it. The current price has also exceeded the "traditional cost basis" of coins acquired by speculators. Their "paper" profit has reached around 20%. The chart below shows the #MVRV ratio for this market segment, with red indicating periods when the market traded below the base cost and green indicating periods when it traded above it. A similar pattern emerges with the #SOPR indicator, which characterizes the profitability of spent coins. Just like with MVRV, speculators have started closing their positions in a "positive" territory.
Due to a relatively smaller slump compared to 2021-2022, short-term investors did not experience the same panic and fear typical of the previous bear market in 2022. Analysts view this as a sign of speculators' resilience.
Overlaying the two aforementioned metrics allowed analysts to create an oscillator that reflects investor confidence. At present, the #indicator

has rebounded to a neutral level and is on the verge of entering a positive zone, where the "cost basis" of spent coins will surpass that of Bitcoins held in wallets. The rally in digital gold has put coins held by hodlers into a positive position. Their share has increased from 57% to 81%. In absolute terms, this figure has risen by 4.7 million BTC, equivalent to 24% of the current supply. These metrics provide insight into how many coins were added to wallets within the $27,000 to $35,000 range. The surge in prices did not trigger a strong reaction among long-term investors. The number of coins they own reached a new all-time high of 14.899 million BTC. The ongoing growth of this metric indicates that a larger supply is maturing into "hodler conditions" than is being spent.
Approximately 29.6% of the supply is held at a loss - a historically high value for this metric, considering the strong upward trend in the market since the 2022 lows.
"This suggests that hodlers may be more 'seasoned' and 'resilient' compared to previous cycles," experts noted. The driver of the improved sentiment is the expectation of Bitcoin ETF approval.
On October 23, BlackRock's proposed instrument, iShares Bitcoin Trust, appeared on the DTCC asset list for which the company provides post-trade, clearing, and settlement services.
Recall that Matrixport analysts predicted the rise of digital gold to $42,000-56,000 if the product is approved. CryptoQuant received figures of $50,000-73,000.
Earlier, Glassnode experts, based on an assessment of capital movement between hodlers and speculators, concluded that the current structure of the first cryptocurrency market is similar to the recovery phase after periods of bear dominance in 2016 and 2019.

In the short term, Bitcoin, which recently tested the $35,000 level, is expected to continue its upward trend due to rising trading volumes and an influx of funds into cryptocurrency funds. Positive news and dominance
According to Nikita Zuborev, an analyst at the BestChange aggregator, a local trend has emerged amid moderately positive news - the SEC's refusal to continue the investigation against Ripple executives and a US appeals court decision to review #Grayscale's application to convert its cryptocurrency trust into a spot Bitcoin ETF.
Additional impetus for growth was provided by a series of margin position liquidations.
"In general, there's nothing threatening Bitcoin's current local trend direction in the coming weeks. This week, in the absence of new positive news, we'll likely see a period of consolidation around the $34,000-$35,000 levels. However, if new positive press releases are issued, continued growth up to $40,000 is possible," Zuborev speculates.
The Bitcoin dominance index has exceeded 52%, a record in the last 2.5 years. Based on historical data, the analyst called the current situation the beginning of a moderate market growth phase due to the inflow of capital into the leading cryptocurrency.
"This phase is expected to last for about six more months, after which, with the arrival of the halving, the much-anticipated rally will begin. Another six months later, a redistribution phase will start, during which funds from Bitcoin will be massively transferred to altcoins, driving up prices for the entire market," he says. According to Zuborev, this trend is expected to continue at least until the end of 2024.
Not a Rally, but a Revival
According to Anton Toroptsev, the Regional Director of Commex in Russia and the CIS, a good sign of the market transitioning to a bullish phase is that negative news no longer significantly affects it.
He pointed to significant pumps in some altcoins, such as MINA (daily growth of ~88%, according to CoinGecko).
Toroptsev also maintains conservative estimates for Bitcoin's movement and does not expect it to surpass the $38,000 level in the coming days.
"It's too early to talk about the start of a rally, but it's definitely a healthy market revival. I would expect further increases in volatility and trading volumes. However, based on past cycles, there's still room for correction," he added.
Movement Is Not Over
Trader Vlad Cohen sees short positions, stop-losses, and the influx of liquidity from China and almost 2 billion printed stablecoins as the fuel for Bitcoin's current growth. However, the primary driver remains the expectations of Bitcoin #ETF approval.
"The emotional backdrop after the fake news about the approval of BlackRock's spot #Bitcoin ETF turned negative, leading to an increase in short positions. And although the stock market saw a correction, Bitcoin continued to rise, restoring its correlation with gold. This was a sign of the asset's strength," he noted. According to his observations, nearly 2.7 billion #USDT flowed into Binance in three days. Serious sales below $30,000 did not occur, although breaking through sell orders above $30,200 was not easy. The next resistance level is $36,000-$37,500," the trader pointed out.
Cohen also called for a focus on asset purchases by large investors, similar to what happened in July, shortly after #BlackRock CEO Larry Fink's statement about digital gold's ability to withstand inflation alongside precious metals.
Furthermore, BlackRock mentioned in its own documents the sale of the President-investor package of iShares Bitcoin Trust shares. Cohen explains that this package of shares was supposed to be used to buy Bitcoin on the market.
Self-Fulfilling Prophecy
Andrey Velikiy, the co-founder of Allbridge.io, reminded of one of the simplest ways to analyze what's happening in the market: when people buy a cryptocurrency, it rises, and when they sell, it falls.
"However, at certain times, the market is more inclined toward one trend than another. Right now, it's called 'Uptober,' and the expectation of growth in October can become a self-fulfilling prophecy, especially if market makers support it," he said.
He included expectations of an influx of institutional capital after Bitcoin ETF approval, global instability and military conflicts, and the planned halving in 2024 among the objective growth factors.
Speaking of altcoins, Velikiy noted that they have a tendency to "shoot up" after strong movements in the first cryptocurrency. He expects high activity in some of them in the coming days.
"What concerns me is the lack of new narratives in the market. In the last bullish market, we had the concept of decentralized finance, and during DeFi Summer, anything even remotely related to it saw growth. But now, we're seeing roughly the same projects as a year or two ago," he said.
The expert is not rushing to interpret the current situation as a rally, as "isolated price jumps are not equivalent to sustainable growth."
"I would like to believe that our long-suffering market is starting to revive after all the shocks of recent years, but I'm currently skeptical. I'll be happy if I'm proven wrong," he concluded.
At the time of writing, Bitcoin is trading at $34,495, according to CoinGecko.
Earlier, Glassnode experts, based on the assessment of capital movement between hodlers and speculators, concluded that the current structure of the first cryptocurrency market resembles a recovery phase after bear dominance in 2016 and 2019."
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