Bitcoin (BTC) broke above $65,000, giving investors confidence that a rally is imminent. The move has fueled optimism that BTC could soon surpass $70,000, a price last seen nearly three months ago.
However, there is a potential threat that long-term holders (LTHs) may take profits and sell, which could dampen the upside momentum.
What Bitcoin Needs to Reach $70K
Bitcoin’s price is known to perform well in Q4. However, BTC’s rally still depends on factors other than just emotions and investor behavior.
In an interview with BeInCrypto, 21.co’s cryptocurrency research strategist Matt Mena outlined other factors that could influence Bitcoin’s rally to $70,000.
“One major catalyst is a potential Fed rate cut, which is likely to drive risk appetite across financial markets. Investors are moving capital out of lower yielding assets like fixed income and seeking higher yields in riskier assets like equities and cryptocurrencies. Lower rates are also a factor in injecting liquidity into the markets, which Bitcoin has historically benefited from given its strong correlation with global M2 money supply. As liquidity increases, valuations for riskier assets often increase, including Bitcoin,” Mena told BeInCrypto.
Mena also noted that the upcoming US elections will play a significant role in shaping BTC’s trajectory.
“Additionally, the political climate is becoming more favorable, with both presidential candidates supporting cryptocurrency innovation in the United States, suggesting a more supportive regulatory environment. This political support could bolster investor confidence and drive additional capital into the market as regulatory concerns diminish,” Mena said.
Read more: What Happened at the Last Bitcoin Halving? Predictions for 2024
However, before reaching $70,000, Bitcoin hit $65,000, the highest it has been in almost two months, which will make long-term holders consider selling. Historically, LTHs tend to sell when prices peak, and their selling pressure can have a significant impact on the market.
The Liveliness indicator, which tracks long-term holder activity, is rising. This indicates that LTHs are starting to liquidate their positions. This could lead to a price correction. Liveliness rises when long-term holders sell and falls when they HODL.
LTHs are considered the backbone of Bitcoin's stability, and if they start selling in large quantities, volatility can increase. Their selling activity can prevent Bitcoin from maintaining a higher price, and can lead to a short-term price decline.
BTC Price Prediction: Breaking 68,500 is the Key
Bitcoin is currently trading at $65,371 and has successfully turned $65,000 into support. The next major target is to turn $70,000 into solid support. This will be key to continuing Bitcoin’s uptrend.
Bitcoin has already broken out of an ascending symmetrical triangle pattern, suggesting the cryptocurrency could rally by as much as 35%, with a potential target of $81,556. However, a more realistic outlook sees $70,000 as the next target as BTC continues to gain momentum.
Read more: Bitcoin Halving History: Everything You Need to Know
A rally above $70,000 would require strong investor support and favorable macroeconomic conditions. If these factors do not materialize and selling pressure from long-term holders increases, Bitcoin may struggle to break above $68,500 . In this situation, BTC may lose the $65,000 support level, which would invalidate the bullish outlook and lead to further declines.
