Bitcoin (BTC) breached the $65,000 barrier, instilling confidence in investors that a rally may be imminent. This move has sparked optimism that BTC could soon push beyond $70,000, a price last seen nearly three months ago.
However, long-term holders (LTHs) are posing a potential threat, as they may look to sell and book profits, which could hinder further upward momentum.
Bitcoin Needs This to Reach $70,000
Bitcoin’s price is known to perform well in the fourth quarter. However, BTC’s rally is still dependent on more than just sentiment and investor behavior.
In an interview with BeInCrypto, Matt Mena, Crypto Research Strategist at 21.co explained what other factors could affect Bitcoin’s rise to $70,000.
“One key catalyst is the Federal Reserve’s potential interest rate cuts, which would likely drive a risk-on sentiment across financial markets as investors move capital out of lower-yielding assets like fixed income into riskier assets such as equities and cryptocurrencies in search of higher returns. Lower interest rates also inject liquidity into the market—a factor that Bitcoin has historically benefited from, given its strong correlation with the global M2 money supply. As liquidity rises, we often see an increase in valuations of risk assets, including Bitcoin,” Mena told BeInCrypto.
Mena also stated that the upcoming elections in the United States will play a major role in shaping BTC’s trajectory.
“Additionally, the political landscape is increasingly favorable, with both presidential nominees endorsing crypto innovation in the US, signaling a more supportive regulatory environment. This political endorsement could enhance investor confidence and catalyze further capital inflows into the market as regulatory concerns diminish,” Mena stated..
Read more: What Happened at the Last Bitcoin Halving? Predictions for 2024
But before $70,000, as Bitcoin reaches $65,000, it also hits a near two-month high, prompting long-term holders to consider selling. Historically, LTHs tend to sell when prices peak and their selling pressure could significantly impact the market.
The Liveliness indicator, which tracks long-term holder activity, is showing an uptick. This indicates that LTHs have started to liquidate positions, which could lead to a price correction. Liveliness rises as long-term holders sell and decreases when they HODL.
Bitcoin Liveliness. Source: Glassnode
LTHs are considered the backbone of Bitcoin’s stability, and if they begin selling in large quantities, it could lead to increased volatility. Their selling activity could prevent Bitcoin from sustaining higher prices, potentially causing a pullback in the short term.
BTC Price Prediction: Shift Ahead
Bitcoin is currently trading at $65,371, having successfully turned $65,000 into support. The next major target is to turn $70,000 into a solid support level. This will be key to continuing the upward trend for Bitcoin.
Bitcoin has already broken out of a bullish symmetrical triangle pattern, suggesting that the cryptocurrency could rise by as much as 35%, with a potential target of $81,556. However, a more realistic outlook places the next target at $70,000 as BTC continues to gain momentum.
Read more: Bitcoin Halving History: Everything You Need To Know
Bitcoin Price Analysis. Source: TradingView
A rally beyond $70,000 will require strong investor support and favorable macroeconomic conditions. If these factors do not materialize, and long-term holders increase selling pressure, Bitcoin may struggle even to breach $68,500. In such a scenario, BTC could lose its $65,000 support, invalidating the bullish outlook and potentially leading to a further decline.