Whether Bitcoin can reach $70,000 depends on lower interest rates, increased profits for BTC miners, and strong demand for a spot ETF.
From October 23rd to October 25th, Bitcoin rose by 3.8%, but the resistance level is at $68,700. Is the bullish momentum enough to push the price through the $70,000 range? Although the recent interest rate cut by the Federal Reserve has increased investors' risk appetite, the push for Bitcoin to break through the $70,000 mark may depend on four main drivers.
Limiting factors include global economic uncertainty, concerns about high mining selling pressure and low hash rate profitability, the potential impact of the US election results on regulation, and a large amount of Bitcoin reserves on exchanges.
Amid global economic uncertainty, investors are cautious. Although Bitcoin has become one of the top ten global assets by market value, alongside giants such as TSMC, Berkshire Hathaway, Tesla, and Walmart, investors also have reasons not to "bet the farm." Traditional assets offer stable returns, with fixed income yields at 4.7%, so the motivation to turn to Bitcoin remains limited. Therefore, investors may choose to wait for more signals from the broader market before committing to a target price of $70,000.
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Selling pressure from Bitcoin miners and on-chain activity
Concerns also stem from the Bitcoin mining industry, which is struggling with profitability in the face of headwinds. The hash rate index, a measure of mining revenue potential, has dropped to near historical lows, at $49 per petahash per second (PH/s) per day, down about 50% since the halving in April. This decline highlights the financial pressure faced by miners, who are crucial for ensuring network security, and their actions could affect Bitcoin's price dynamics as they adjust their operational strategies.
Given that miners hold a total of over 1.8 million BTC (equivalent to about $122.4 billion), many traders worry that these entities may be forced to sell off significantly.
In a recent interview with Bloomberg, Luxor Technology Chief Operating Officer Ethan Vera said, "You will continue to see negative profits, and they are diluting shareholders' equity to cover up how bad the current industry situation is and how poorly their operations are doing."
On-chain data does not provide much comfort, as the 7-day average of active Bitcoin addresses has remained essentially unchanged over the past six months. This trend reflects the stagnation of Bitcoin search volume on Google, indicating limited growth in public interest.Spot Bitcoin ETF Accumulation and Exchange Deposits
Some analysts anticipate that substantial accumulation of spot Bitcoin exchange-traded funds (ETFs) could trigger a "supply shock." However, this prospect does not fully account for the significant BTC deposits in exchanges, which remain high. Current estimates range from 1.9 million to 3 million BTC, varying based on custodial activities from companies like Coinbase.
Even if spot ETFs continue to accumulate an ambitious $2 billion per month, there is still at least $129.2 billion available in foreign exchange reserves. Predicting the exact price that would trigger a massive sell-off remains challenging. Nevertheless, it is conceivable that more BTC could enter exchanges, and some ETF holders might opt to sell their positions after achieving significant gains.
Traders need a combination of factors—including reduced interest rates, increased mining profitability, and robust ETF accumulation—to gain enough confidence to increase their Bitcoin positions and push the price past the $70,000 threshold.
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