Bitcoin has surged past the $30,000 mark with remarkable ease, setting new yearly highs, according to data from IntoTheBlock. The on-chain data reveals that approximately 80% of Bitcoin holders are currently in profit, a level not seen since the bull market’s peak in 2021. This remarkable rise in profitability among holders underscores the renewed optimism in the market.
As Bitcoin inches closer to the $40,000 mark, there is no notable on-chain resistance, and the $30,000 level may now serve as solid support should a retracement occur. A 27% increase in the amount of Bitcoin held by short-term traders over the past 30 days suggests a growing bullish sentiment as new entrants acquire Bitcoin during its upward trajectory.
Glassnode’s Depth Analysis of Bitcoin’s Climb
Glassnode’s analysis of Bitcoin’s recent climb highlights the significance of this surge. Bitcoin has not only broken past the mid-cycle price level of $30,000 but has reached $35,000. This move began with a convincing break of key technical and on-chain levels, demonstrating strength in the market. Notably, long-term moving averages around $28,000 had acted as resistance throughout September and October. However, this week, the bulls broke through the 111-day, 200-day, and 200-week averages, indicating a substantial shift in market dynamics.
Analysts often examine derivatives data to understand the drivers behind significant market moves. The recent drop in open interest in perpetual swap markets coincided with a substantial reduction in short positions, leading to a squeeze of shorts. Approximately $56 million in short positions were liquidated on October 17th, followed by an additional $125 million on October 23rd, contributing to the magnitude of this short squeeze.
Futures liquidation volumes reveal a shift towards short dominance in the market over the past 30 days, historically coinciding with local market extremes. Funding rates and cash-and-carry basis in futures markets have remained relatively stable, suggesting that the rally may not be solely driven by leveraged speculation.
Long-term investors have benefited from the rally, with a significant portion of the supply transitioning from “in-loss” to “in-profit” as Bitcoin surged from $27,100 to $35,100. This development underscores the increased demand for Bitcoin as it climbs towards year-to-date highs.
Furthermore, the Long-Term Holder cohort remains resilient, with their aggregate holdings reaching an all-time high of 14.899 million BTC. While some long-term holders are still at a loss, they appear to be holding steadfast in comparison to previous market cycles.
Nevertheless, Bitcoin’s surge to new yearly highs has broken through key technical and on-chain levels, with a significant proportion of investors now finding themselves in profit. The market’s newfound strength and resilience among long-term holders bode well for the continuation of the 2023 uptrend, although market participants should remain vigilant in the weeks ahead.
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