Just over a year ago, Bitcoin [BTC] was valued at $25.7k. Last September, there was a sense of pessimism in the market, and the halving event was seven months away. The mood began to shift in October with rumors swirling about a possible SEC approval for a spot ETF and indications that inflation had peaked.
These factors combined to make Bitcoin more appealing to potential investors, resulting in an upward price trend that culminated in a record high of $73.7k by March 2024. Could this October see a resurgence that surpasses the highs of this year?
Optimism Among Investors due to Bitcoin Rainbow Chart
The Bitcoin Rainbow Chart offers an interesting perspective on Bitcoin’s long-term price trends. Using a logarithmic scale to chart Bitcoin’s price and color-coded zones to indicate buying, selling, or holding opportunities, the chart serves as a valuable tool for investors.
While not foolproof, the Rainbow Chart has been relatively accurate in forecasting cycle highs and lows, particularly the latter. Though it has recently dipped into pessimistic territory, it has yet to reach the optimal buying zone.
Despite this, BTC remains within a favorable buying range, with the Rainbow Chart labeling it as a “fire sale.” Comparing the current cycle to the previous one, it is plausible that Bitcoin could kickstart a significant rally in the latter part of October.
This potential surge might signify the bull run typically witnessed after a halving event.
Impact of Downtrend on Holder Profitability since April
Presently, the Net Unrealized Profit/Loss (NUPL) stands at 0.47, indicating that the market cap exceeds the realized cap, implying that a substantial number of holders are still in profit despite the downward price trajectory over the past half-year.
The NUPL has mirrored the price decline, suggesting that profitable holders are less inclined to sell, creating the possibility for price appreciation in the upcoming months. A NUPL reading exceeding 0.7 commonly signifies the cycle’s peak.