Bitcoin Price Eyes $70k Rally as Traders Move $5B into Long-term Storage

Bitcoin Price Analysis

Bitcoin surged towards the $65,000 mark on Monday, August 26, gaining 5% in just four days. On-chain data reveals a trend where traders are increasingly moving their BTC into long-term storage as anticipation builds around a possible interest rate cut by the U.S. Federal Reserve in September 2024.

Bitcoin Retests $65k for the First Time Since August Market Crash

August started with a jolt as Bitcoin prices plummeted to a three-month low of $49,111 on August 5, causing over $500 million in liquidations across the crypto market. However, Bitcoin has since rebounded strongly. As of August 25, Bitcoin has surged 15.8%, rising from $56,150 to just below $65,000.

The BTCUSD daily price movement chart above illustrates that bullish sentiment has dominated Bitcoin’s market in the latter half of August.

Despite the price nearing $65,000, bears resisted the upward momentum, causing a retracement. As of August 27, Bitcoin has pulled back to $62,000, marking a 4.19% decrease from its recent high.

Yet, despite the short-term correction, on-chain data suggests that Bitcoin could continue its upward trajectory in the near term.

Investors Transferred $5B Worth of BTC in 30-Days

Bitcoin traders are increasingly opting for cold storage over the last 30 days, likely to capitalize on anticipated long-term gains from the potential Fed rate cut in September 2024.

Exchange reserves, which represent the amount of Bitcoin held on exchanges, have dropped significantly, emphasizing a bullish outlook for the coming weeks.

As of July 25, exchange reserves stood at 2,759,823 BTC, but by August 25, they had declined to 2,677,614 BTC.

This 82,209 BTC reduction, valued at approximately $5 billion at current prices, suggests a massive transfer of Bitcoin into cold storage. This movement reduces the short-term market supply, potentially fueling a bullish outlook.

Two key factors make this trend bullish for Bitcoin. First, it indicates that investors are preparing for a longer-term hold strategy, signaling confidence in future price increases. Second, the reduction in exchange reserves decreases the likelihood of immediate selling pressure, which could help sustain the price levels.

This downtrend in exchange reserves hints that rather than selling now, investors are opting to save their BTC long-term, anticipating bigger profits post the Fed rate cut in September.

BTC Price Prediction: $70k Breakout in September?

Bitcoin’s 4% retracement to $62,500 could be a temporary dip before Bitcoin resumes its upward momentum. The key technical indicators on the chart suggest a potential for further gains. The Keltner Channel (KC) analysis reveals that Bitcoin’s price is currently testing the upper boundary, indicating strong upward momentum. The Average Daily Range (ADR) stands at 1.12, reflecting moderate volatility, which could support a steady climb.

Support is currently found around $61,000, the mid-point of the Keltner Channel. This level is critical to maintaining the bullish narrative. A break above $66,000, the upper boundary of the channel, could see Bitcoin test and possibly break the $70,000 level by September.

However, failure to hold the $61,000 support could see Bitcoin retesting the $56,800 level. Given the bullish on-chain metrics, the likelihood of a breakout towards $70,000 remains high, especially with the Fed’s potential rate cut acting as a catalyst for further gains.