Bitcoin‘s October performance is under scrutiny as on-chain metrics reveal a complex landscape. With exchange reserves remaining low, demand showing signs of recovery, and large investors boosting their assets, analysts are cautiously optimistic about a potential market trough. However, CryptoQuant’s analysis emphasizes that confirming a bottom is still premature despite some positive shifts.
Market Dynamics: Accumulation and Demand Trends
CryptoQuant’s report from October 12 highlights three key on-chain changes supporting a possible bottom formation for Bitcoin. Although Bitcoin reserves on exchanges have marginally increased, they remain at historically low levels. Meanwhile, the “Apparent Demand” indicator, which measures new demand for Bitcoin, has rebounded sharply from notably negative levels. Yet, its position below zero suggests the demand recovery is not fully achieved.
The holdings of large investors have surged to approximately 3 million BTC. These persistent high levels of accumulation during recent price corrections are significant.
Macroeconomic conditions have also shown some improvement. The probability of the Federal Reserve hiking interest rates in October has decreased to around 18%, and Brent crude prices have dipped from approximately $110 to $103 per barrel. As the U.S. midterm elections on November 3 approach, political uncertainty is expected to gradually diminish, potentially prompting investors to reassess their asset allocations.
To confirm a Bitcoin bottom, continuous inflows into spot exchange-traded funds (ETFs), strengthened buying in the U.S. spot markets, and further demand recovery are needed. The analyst notes that while October’s strong performance may suggest a bullish trend, it does not guarantee a continuous price surge throughout the month. He suggests the current pullback might lay the foundation for future gains.
Older Mining Equipment Faces Profitability Challenges
According to on-chain analyst Axel Adler Jr.’s October 12 bulletin, transaction fees comprised only an average of 0.64% of miners’ total revenue over the last 30 days. This figure, slightly down from 0.65% a week ago, has remained below 1% since mid-August 2025.
Miners’ earnings rely heavily on the price of Bitcoin and the energy efficiency of their equipment. Adler’s calculations indicate that assuming electricity costs $0.05 per kilowatt-hour, the electricity cost of producing a single Bitcoin with an Antminer S19 is approximately $86,700, overshooting Bitcoin’s price near $84,000.
By contrast, the newer Antminer S21 has an estimated electricity cost of about $44,300 per Bitcoin, offering more profitable margins to those using energy-efficient models. These calculations, however, do not account for expenses related to equipment acquisition, cooling, and maintenance.
Rising Bitcoin prices could mitigate losses from electricity costs for older devices and enhance profit margins for more efficient equipment. Conversely, a price drop could pressure miners’ revenues.
Adler points out that the sub-1% share of transaction fees in revenue does not necessarily imply miners are shutting down equipment en masse or selling Bitcoin reserves. A sustained rise above 1% could signal a strengthening contribution of transaction fees to miners’ income.
