BTC Reclaims $50k in a Recovery Rally

October started the season strong, with the price of Bitcoin, Ether and most altcoins spiking. The price of Terra’s native coin LUNA, in particular, surged by 30.1% in the past seven days. Despite China’s regulatory crackdown on crypto mining earlier this year, the miners to exchange flow metric has reached an all-time high of 12.5 BTC, indicating that miners are profiting after the miner exodus. 

Source: Glassnode

$28 trillion of U.S. government debt, the Evergrande debt crisis and regulatory crackdown — you name it, September’s had it. Furthermore, the CBOE Volatility Index (VIX, a.k.a. the Fear and Greed Index) spiked by 42% within the month. October may look optimistic —  for now — but will the “ghost of September past” make a comeback this Halloween? 

Bitcoin Halloween or “Hello-Win?”

Few factors will determine this year’s crypto spook factor. The U.S. Federal Reserve’s tapering temperament, for instance, will impact traders’ mindsets more than actual liquidation. It is also noteworthy to mention that BTC’s most violent increase occurred in the first half of the year when the Fed’s balance sheet size was almost doubled. But since July, it has only expanded by around 18% — a weak justification for a strong rally. 

Source: Federal Reserve

On the flip side, the market expects a slight tapering of only 25 basis points or lower by the end of 2023. Hence, the impact of tapering may possibly be muted. 

Muted Taper

Source: CME

That aside, a growing trend of accumulation amidst the market turmoil last month provided a leg up for an October rally. As BTC broke out of its resistance level and climbed to $50,000 today, the long-and-short-term holder supply in profit increased to 89%. 

Addresses above 1,000 BTC were HODLing. 

In the previous late-stage bear and early-stage bull cycles, the net unrealized profit/loss (NUPL) value was at 0.5 before catapulting into higher rallies; we are currently at 0.56. If BTC’s NUPL continues to rise above 0.5, BTC could potentially see an upward price movement from its current level. But the million-dollar question still remains: What’s next for Bitcoin after it reclaims $50k? 

Source: Glassnode