Why Bitcoin's Rally Has Room to Run This Month

In brief

Realized profits have fallen 50% since July, signaling restrained selling pressure.
Long-term holders’ profit margins remain well below overheated cycle levels.
Derivatives traders are clustering around $120,000 call options, reinforcing bullish sentiment.

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Bitcoin's push to new record highs this week isn’t letting up, with on-chain data and derivatives activity revealing a market built on stable foundations rather than speculative excess.

The current market run still has momentum as profit-taking remains below prior cycle peaks despite Bitcoin setting numerous all-time highs this year, according to CryptoQuant’s latest weekly report.

Kicking off what has historically been Bitcoin's strongest month, dubbed "Uptober," the original crypto has sparked a broad market rally, with capital rotating into older altcoins.

Questions now arise over the sustainability of the historic run for digital assets—a peek at on-chain data tells the story.

Bitcoin holders have realized just $30 billion in profits over the past 30 days, according to CryptoQuant, representing a 50% decline from July's peak of $63 billion and falling well below the $78 billion and $99 billion levels seen during the March and December 2024 market tops.

The conviction extends to Bitcoin's long-term holders, whose realized profit margins currently stand at 129%—far below the 300% threshold that typically signals market exhaustion.

"Currently, $120,000 to $140,000 call options remain the most heavily concentrated contracts, with the $120,000 key level seeing the highest concentration of Bitcoin positions," Adam Chu, chief researcher at GreeksLive, told Decrypt.

He explained that major players are clustering around out-of-the-money calls—options contracts that only become profitable if Bitcoin's price rises above specific strike prices.

"Market maker gamma levels remain low, meaning minor price fluctuations have limited impact," Chu noted, adding that $110,000 serves as crucial support while new highs could trigger accelerated buying activity.

The convergence of disciplined holding patterns and sophisticated bullish positioning points toward sustained upward momentum.

"Personally, I still believe October's market conditions will be favorable," Chu said, noting that multiple seasoned institutional traders have expressed optimism about the fourth quarter in their discussions.