Bitcoin (BTC) has broken through $65,000, inspiring investors to believe a rally is on the way. Here's what could stop it from growing further
Bitcoin's recent rally has investors optimistic that BTC could soon surpass $70,000. The last time the currency reached these levels was almost three months ago. However, long-term holders (LTH) could become a potential threat if they decide to sell their holdings and lock in profits.
What Bitcoin Needs to Reach $70,000
It is known that Bitcoin usually rises in the fourth quarter. However, the BTC rally depends on more than just investor sentiment and behavior.
In an interview with BeInCrypto, Matt Mena, a cryptocurrency research strategist at 21.co, explained what other factors could influence the price to rise to $70,000.
“One of the key catalysts is a potential interest rate cut by the Federal Reserve. This will likely increase risk appetite in financial markets. Investors will begin to shift capital from lower-yielding assets like bonds to riskier ones like stocks and cryptocurrencies in search of higher returns. Lower interest rates also increase liquidity in the market, a factor that Bitcoin traditionally benefits from given its strong correlation with the global money supply M2. As liquidity increases, we often see riskier assets, including BTC, rise in price.”
Mena also noted that the upcoming elections in the United States will play a significant role in determining the trajectory of BTC.
“Additionally, the political environment is becoming more favorable, as both presidential candidates support the development of the crypto industry in the U.S. This suggests that the regulatory environment will become more friendly. Such support from politicians can strengthen investor confidence and facilitate capital inflow into the market, reducing concerns about regulation,” Mena noted.
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However, it is important to remember that Bitcoin has reached a nearly two-month high by reaching $65,000. This may prompt long-term holders to consider selling. Historically, they tend to sell when prices are at their peak. Such activity could significantly impact the market.
The Liveliness indicator is currently showing growth. This metric helps to assess the age of coins involved in transactions and analyze the behavior pattern of their owners. Its value increases when market participants spend old coins, setting them in motion. Asset sales by long-term holders can lead to a price correction.
Liveliness indicator. Source: Glassnode
Long-term holders are the backbone of Bitcoin. If they start selling in large quantities, it could increase volatility and potentially cause a pullback.
Read also: Investors expect Bitcoin to explode in October, here's why
BTC Forecast: Changes Are Coming
Bitcoin has successfully turned the $65,000 level into support. The next important target is to do the same with the $70,000 level, which will be the key to continuing the uptrend.
BTC has already broken out of the ascending symmetrical triangle pattern, which suggests a 35% upside with a potential target of $81,556. However, a more realistic forecast points to the next target around $70,000.
BTC Price Analysis. Source: TradingView
A rally above $70,000 would require strong investor support and favorable macroeconomic conditions. If these factors do not materialize and long-term holders begin to sell aggressively, the currency risks facing difficulties even in overcoming $68,500. In such a scenario, BTC is at risk of losing support at $65,000, which would cancel the bullish outlook and lead to further declines.
