Bitcoin (BTC), the world’s leading cryptocurrency, has experienced significant price movements in recent weeks. Market analysts and on-chain analytics firm Glassnode suggest that BTC is poised to finish 2023 on a positive note, potentially restarting its uptrend. In this article, we will delve into the latest market trends and technical analysis to explore whether Bitcoin is indeed in the process of restarting its uptrend.
Current market analysis
Bitcoin Price Breaks Resistance Levels
Bitcoin has shown resilience in the past week, surpassing key resistance levels and setting the foundation for a potential price uptrend. Glassnode highlights that BTC convincingly broke through several moving averages, including the 111-day, 200-day, and 200-week averages. This breakthrough indicates a shift in market sentiment and suggests that bulls are gaining strength.
Bitcoin: Improved Profitability for Investors
The recent price surge has significantly improved the profitability of various investor cohorts. Glassnode notes that the average recent investor is now making an average profit of +20%, with the short-term holder (STH) cost basis at $28,000. This positive development indicates that a meaningful proportion of supply and investors find themselves above the average break-even price, creating a potential foundation for an uptrend.
STH-MVRV Ratio Analysis
The short-term holder market-value-to-realized-value (STH-MVRV) ratio is an essential metric for tracking the profitability of STH coins. Glassnode’s analysis reveals that even before the recent price increase, no major capitulatory behaviour was observed. While previous corrections have seen STH-MVRV decline significantly, the recent correction leading up to the rally has been relatively shallow. This observation suggests strong support in the market, further indicating the potential for an uptrend.
Bitcoin: Long-Term Holders and Supply Dynamics
Decreased Presence of STH Entities
Historically, the presence of short-term holders (STH) and long-term holders (LTH) has played a crucial role in BTC’s price movements. Currently, the presence of STH entities relative to LTH entities is at a historically low level. This decrease in STH entities, coupled with the increase in LTH entities, indicates a shift in market dynamics.
LTH Ownership and Cost Basis
Long-term holders now own more than three-quarters of the available BTC supply for the first time, indicating a strong belief in the long-term potential of Bitcoin. Their cost basis is lower, closer to $20,000, suggesting that even if Bitcoin were to experience a temporary price decline, it may find support around this level.
Conclusion
Bitcoin’s recent price movements and market dynamics suggest the potential for a restart of its uptrend. The breakthrough of key resistance levels, improved profitability for investors, and the presence of long-term holders with a lower cost basis provides a solid foundation for positive price momentum. However, it is crucial to consider various factors that can impact Bitcoin’s price trajectory. As the year progresses, it will be interesting to observe how Bitcoin performs in the coming months.
