Bitcoin Sees Unprecedented Surge in Address Creations, Fueling Bullish Speculation
October begun on a positive note for Bitcoin enthusiasts, as the world’s leading cryptocurrency experienced a surge, recapturing the $27,000 level early Sunday.
This modest yet encouraging uptick is regarded as a promising commencement to a month known for its historical propensity to usher in bullish trends, getting itself the “Uptober” nickname within the crypto community.
That said, amid Bitcoin’s price performance showing promise, its fundamentals have also started to shine. According to data from crypto mining research firm Blockware Solutions, approximately 550,000 new Bitcoin addresses have been created daily over the past 30 days.
This data was highlighted by popular crypto analyst “Mitchell HODL” who observed in a tweet, “This is an unprecedented amount of on-chain activity for a bear market. The only times prior in which activity was this high was during the absolute peak of the past two bull markets.”
Notably this surge in on-chain activity is particularly noteworthy as it defies the conventional wisdom associated with bear markets and holds significant implications for Bitcoin’s bullish case.
Elsewhere, in a thread of tweets this week, onchain analytics firm Santiment revealed that Bitcoin’s larger holders, often referred to as “sharks and whales” (wallets holding 10 to 10,000 BTC), have accumulated the highest amount of Bitcoin in 2023, totalling 13.03 million BTC. This accumulation trend also extends to Tether holders, presenting a bullish combination that suggests growing confidence in Bitcoin’s future price prospects.
Further bolstering the bullish case for Bitcoin in the fourth quarter of 2023 is the evolving landscape of cryptocurrency exchanges. Over the past year, several significant changes have occurred. According to data from another onchain analytics platform Cryptoquant, Bitcoin reserves on US-based exchanges like Coinbase, Gemini, and Kraken have declined significantly, ranging from 30% to over 50% over the past year. This trend indicates a potential accumulation of Bitcoin by institutional investors.
The firm also noted that institutions have steadily accumulated Bitcoin, with withdrawal records and wallet activities supporting this notion. For instance, over 20,000 BTCs were withdrawn from Gemini in August alone, constituting approximately 25% of the total holdings on the exchange.
Furthermore, market participants have shown an increased interest in derivative products, with Bitcoin Open Interest hitting its highest all-time high (ATH) since November 2022. Despite a correction in August 2023, the futures market remains robust, highlighting sustained enthusiasm from traders.
That said, Bitcoin’s positive start to October and its on-chain solid fundamentals could bolster price higher in the fourth quarter of 2023, with traders now eyeing the $30,000 range.
At press time, Bitcoin was trading at $27,702, after a 1.29% surge in the past 24 hours, according to CoinMarketCap data.
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