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Bitcoin (BTC) has crossed $65,000, reviving traders’ hopes of an “Uptober” rally that could extend the digital asset’s bullish momentum.
Is The Bitcoin “Uptober” Rally Finally Here?
In the early hours of October 15, Bitcoin briefly crossed $66,000 before returning to $65,964 at the time of writing. In the last 24 hours, BTC has gained 1.4%.
According to a report by crypto exchange Bitfinex, Bitcoin’s decisive move passed the key resistance level of $63,000, combined with encouraging on-chain metrics, pointing to a possible upward trend.
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The report points out that Bitcoin’s observed untapped cash flow (UTXO) is an “important on-chain metric for measuring Bitcoin’s market power.”
For the uninitiated, Bitcoin UTXO age bands refer to the number of different groups of BTC – based on the length of their holdings – that were last deleted. In fact, it helps to track the average purchase price for all age groups of BTC holders, showing the market sentiment and profitability of certain groups.
Notably, short-term (3-6 months) and medium-term (6-12 months) moving averages have historically been key levels of support or resistance. The price for a short-term owner is approximately $63,000, and the price for a medium-term owner is $55,000.
When Bitcoin trades below the average purchase price of these groups, it usually shows a bearish trend. Conversely, moving above these levels would indicate bullish momentum.
Since BTC passed the $63,000 resistance, some gains may be seen. However, failure to close above this level resulted in a potential drawdown of $55,000.
Market Shows Strong Appetite for Digital Assets
The report highlights the weak price action of BTC on October 10, when it dropped to $58,943 due to the lack of aggressive buying in the local market. According to the report, most of the sales came from Coinbase.
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The report talks about the Coinbase Premium Gap Indicator (CPGI) – a metric that shows the difference between the BTC-dollar pair on Coinbase against other major central markets.
CPGI dropped by 100 points as the price of BTC dropped below $59,000. The report notes that during the past year, any time the CPGI dropped below 50 points, the price of BTC saw the next recovery. The report adds:
Bitcoin has been trading within a wide range for the past eight months. When a bear market starts, selling usually happens when Coinbase Premium turns negative. However, such selling was not observed, suggesting that despite the volatility, the market remains stable without fear-driven distribution. This strength may indicate underlying strength or balanced market sentiment that may guide future price movements.
This analysis is in line with a separate report by crypto firm QCP Capital, which noted that the shallow sell-off in the crypto market following political tensions between Iran and Israel shows continued demand for the risk asset.
In related news, BTC bulls will be relieved to hear that crypto exchange Mt. Gox delayed its payment until October 2025, which may ease the pressure on selling the property.
However, some commentators be warned that BTC may face price reductions due to tight on-chain liquidity. At the time of writing, Bitcoin is trading at $65,964, up 1.4% in the last 24 hours.
Featured image from Unsplash, charts from CryptoQuant and Tradingview.com
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