Bitcoin (BTC) remains strong despite delays in BTC exchange-traded fund (ETF) approvals by the US Securities & Exchange Commission (SEC). However, caution is advised for those diving into the current BTC rally.
In the first two quarters of 2023, Bitcoin surged by an impressive 80%. However, it faced a setback in the third quarter, experiencing an 11% drop. But there’s a silver lining with a positive monthly close in September, a rarity since 2016.
October’s Potential: A Historical Perspective
October is historically kind to Bitcoin, with only 2014 and 2018 bucking the trend of positive monthly returns since 2013. While past performance doesn’t guarantee future results, it’s a valuable reference point for traders.
With mounting concerns about US debt and a depreciating dollar, Bitcoin is gaining traction as a store of value immune to government interference.
Bitcoin’s Edge in US Debt Default Scenario
What effects could a US Debt Default have on Bitcoin or Digital Currencies? As people lose faith in the US dollar, digital currencies have become better options.
Learn why America’s debt default may result in increased inflation, decreasing the popularity of traditional investment practices. Inflation-induced devaluation is guarded against through a fixed supply of bitcoin.
Onchain Data Indicating Bullish Momentum
Understanding the Taker Buy Sell Ratio indicator is important for trading. Looking back, past spikes on this indicator have seen the emergence of substantial Bitcoin bull runs that have given traders insight.
For instance, the latest upturns in the Taker Buy Sell Ratio portend immediate buildup in the Bitcoin sector. Such activity can clue traders in.
Contemporary Bitcoin dynamics show an interesting correlation between investors’ behaviors and price oscillations. Currently, BTC is trading at about $27,000, which happens to be close to the 12-18 Months UTXO Realized Price of $26,950. This means that traders who purchased Bitcoins at this moment are back to their break-even point, in line with the mean cost of acquisition.
Nevertheless, if we look at the six to twelve months Unconfirmed Transfer Out of Value (UTXO) Realized Price, it is lower than the present market price. Investors would find such an indicator as being ‘profitable.’
Investors can recognize signs of investor sentiment when further exploring the Exchange Inflow UTXO Age Bands. The 12–18-month UTXO group demonstrates quite a high degree of endurance as they continue to remain long in their positions despite suffering extended periods of unrealized losses.
Saqib Iqbal, an analyst at Trading.Biz, commented on Bitcoin, “Some suspect Bitcoin’s recent rally is a trap. The fall below $25,000 won’t surprise the market, given the higher yields and much-awaited next halving. Until the Fed looks to loosen its policy, the BTC rally will be limited to $38,000. Hence, patience is the key.”