30s Summary

Bitcoin’s price rose by 3.8% from October 23-25, reaching resistance at $68,700, but it faces barriers in pushing past $70,000. Global economic uncertainty, high sell pressure from Bitcoin mining, possible US regulation changes due to the upcoming presidential election, and large Bitcoin reserves on exchanges could prevent further price increase. Concerns about hefty sell-offs due to a collective possession of over $122.4 billion in BTC also exist. To exceed $70,000, Bitcoin may require a mix of lower interest rates, enhanced mining profitability, and strong accumulation through exchange-traded funds.

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From October 23 to 25, the price of Bitcoin (BTC) went up by 3.8%, hitting a resistance at the $68,700 mark. The question now is whether it can push into the $70,000 bracket. While the Federal Reserve’s recent cuts to interest rates have made some investors more open to taking risks, there are four key elements that could potentially drive Bitcoin over the $70,000 bar.

Factors such as global economic doubt, high sell pressure from Bitcoin mining, changes in US regulations due to the outcome of the next election, as well as the sizable Bitcoin reserves currently on exchanges, have been inhibiting the push beyond that trough.

Investors do harbor concerns given the uncertain global economy. Though Bitcoin has made it to the top 10 list of global assets, some investors are not putting all their eggs in this basket. Traditional investments are still offering steady returns and fixed income is at 4.7%. This means the allure to shift to Bitcoin is somewhat dampened. A lot of people are simply waiting for more signals from the larger markets before they put their money on a $70,000 Bitcoin price tag.

Another factor of concern is the nearing US presidential election. Kamala Harris, the current Vice President and leading candidate, seems to lean towards heavier regulations to protect individual investors. This approach is far from the more favorable view of former President Donald Trump who aimed to integrate digital assets into the traditional scope of finance.

Coin miners selling off Bitcoin and diminishing onchain activities are also worrying. The profitability of Bitcoin’s mining sector has taken a hit recently. The hashrate index indicating the mining revenue potentials has plummeted to a near record low of $49 per petahash per second (PH/s) daily. This reflects the economic pressure bearing down on miners. As miners are pivotal in ensuring network security, their activities could sway Bitcoin’s price.

A collective possession of over 1.8 million BTC, which is roughly equivalent to about $122.4 billion, has led to concerns that heavy selling may be on the cards. These concerns are not exactly unfounded as recent onchain data indicates stagnant adoption and lackluster public interest in Bitcoin.

Lastly, many are predicting a “supply shock” driven by high growth through Bitcoin’s spot exchange-traded funds (ETFs). However, this does not fully account for the substantial BTC deposits on exchanges. Even if spot ETFs are ambitiously accumulated to the tune of $2 billion per month, there would still be at least $129.2 billion available in exchange reserves.

Therefore, to kick Bitcoin’s price beyond the $70,000 limit, a combination of factors like lower interest rates, improved mining profitability, and strong ETF accumulation will be needed.

Source: Cointelegraph