Executive Summary
- Bitcoin's Remarkable Rally: BTC surged over 172% in 2023 with shallow corrections (<20%), signaling strong buy-side support.
- Institutional Momentum: October marked a pivot point for capital inflows, breaking key resistance levels like $30k.
- Supply Dynamics: Long-Term Holders now control ~76% of BTC supply, with most coins in profit.
- Market Evolution: Rise of Ordinals/Inscriptions, CME futures surpassing Binance, and Tether’s dominance reshaped the landscape.
This review explores how Bitcoin, Ethereum, derivatives, and stablecoins evolved in 2023—setting the stage for 2024.
Market Performance: Resilience & Breakthroughs
No Major Pullbacks
- BTC: Deepest correction was just -20% (vs. historical -25% to -50%).
- ETH: -40% drawdown in January, but demand remained resilient post-Merge.
Breaking Key Levels
$30k Breakthrough: October’s rally overcame:
- Realized Price 🟠
- 200D-SMA 🔵 & 200W-SMA 🔴
- Cointime True Market Mean Price 🟢
- All Eight Recovery Indicators turned positive, mirroring 2019-20 trends.
👉 Explore real-time charts for deeper insights
On-Chain Activity: Volume, Fees & Innovations
Bitcoin
- Transaction Volume: Doubled to $5B/day post-October.
Ordinals/Inscriptions: Drove transaction counts to ATHs (356k/day).
- Fee Revenue: Spikes reached 25% of miner revenue (comparable to 2017/2021 bull markets).
- BRC-20 Tokens: Dominated text-based inscriptions, consuming 10–15% of blockspace but contributing 30% of fees.
Ethereum
- L2 Growth: TVL bridged to L2s rose 60% ($12B).
- Staking: 34.6M ETH staked (+119% YTD); Shanghai update enabled withdrawals.
Investor Behavior: Long-Term Holders Tighten Grip
- Dormant Supply: 76.1% of BTC hasn’t moved in 155+ days.
- Profitability: 90%+ of BTC supply is now in profit—faster recovery than 2019.
- NUPL Metrics: All cohorts (LTHs, STHs) are moderately profitable but not euphoric.
Derivatives & Stablecoins: Institutional Shifts
Derivatives Growth
- Options OI: Matched futures at $16B–$20B (Deribit dominates).
- CME vs. Binance: CME flipped Binance in futures OI—hinting at institutional demand.
- Cash-and-Carry Yields: Jumped to 8%+ post-October.
Stablecoin Rebound
- Supplies Bottomed: At $120B in October, then grew 3%/month.
- Tether Dominance: USDT reclaimed 72.7% market share; USDC fell to 19.6%.
👉 Track capital flows with live data
FAQs
1. Why did BTC corrections stay shallow in 2023?
- Strong buy-side demand and reduced sell pressure from long-term holders.
2. How did Ordinals impact Bitcoin’s fee market?
- Inscriptions drove 50% of transactions but only 10–15% of blockspace, boosting miner revenue via SegWit discounts.
3. What caused ETH’s sluggish performance vs. BTC?
- Lower relative demand despite L2 growth and successful Shanghai upgrade.
4. Are stablecoin supplies recovering?
- Yes—growth resumed in October after a 26% decline since March 2022.
Conclusion: Setting the Stage for 2024
2023’s rebound laid foundations for:
- Bitcoin ETF approvals
- Halving-driven supply shock
- Institutional adoption via CME/options markets
With LTHs holding strong and derivatives maturing, 2024 promises further momentum.
Disclaimer: This report is for informational purposes only and not investment advice.
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