4 reasons why Bitcoin price could rise to $68k
Bitcoin price has retreated for two consecutive days as last week’s momentum in the crypto and stock market faded.
Bitcoin (BTC) retreated from Sunday, Aug. 26 high of $64,960 to $62,300. Still, there are four main reasons why the coin may stage a comeback and retest the important resistance point at $68,000.
Futures open interest is rising
Third-party data shows that demand for Bitcoin in the futures market is making a strong comeback. Data from SoSoValue suggest that interest jumped to $34.7 billion on Aug. 26, its highest point since Aug. 2 and much higher than this month’s low of $26.65 billion. It has also risen for three consecutive days.
Futures open interest is an important figure that shows the number of contracts that have not been settled. A high figure is a sign that there are more participants in the market, which indicates more demand among market participants.
Spot Bitcoin ETF inflows
More signs of Bitcoin demand are in the exchange-traded funds market. Data shows that most ETFs recorded inflows on Monday, Aug. 26, for the eighth consecutive day. Total inflows rose to over $202 million, an increase from Friday’s $252 million.
These funds added $506 million last week after gaining $32 million a week earlier, and this trend may continue. Altogether, spot Bitcoin ETFs have had over $18 billion in inflows, with the iShares Bitcoin Trust being the most active.
The most recent filings by hedge funds showed that firms like Millennium Management, Citadel, Schonfeld, and Susquehanna had invested in Bitcoin ETFs. Wall Street banks like Goldman Sachs and Morgan Stanley had also invested in these ETFs.
Bitcoin addresses are rising
Meanwhile, on-chain data shows that the number of active Bitcoin addresses is rising. According to SoSoValue, active Bitcoin addresses rose to 671,000 on Aug. 6, up from 538,000 on Sunday. The number is nearing the month-to-date high of 725,000.
More data shows that new addresses in Bitcoin’s network are rising. New addresses rose to 264,000 on Monday, up from 253,000 a day earlier. These numbers mean that there is still demand for Bitcoin in the crypto community.
Federal Reserve cuts
Additionally, Bitcoin may benefit from interest rate cuts as it has done in the past. In a statement on Friday, Jerome Powell noted that the bank would likely start cutting rates in September.
The size of the cut will depend on the upcoming personal consumption expenditure and non-farm payroll data. A weak jobs report will raise the odds of a jumbo 0.50% cut.
Bitcoin does well when the Fed is cutting rates, as it did in 2020 when the Fed intervened because of the COVID-19 pandemic. It also rose in 2017 as the Fed slashed rates and then reversed in 2018 and 2022 when it hiked. It raised rates four times in 2028 and six in 2022 as inflation rose.
Additionally, $68,000 is an important level since it is along the series of lower highs that Bitcoin has been forming since March. The first one was at $73,800, followed by $72,000 in June, and $70,000 in July. A break above $68,000 will likely be a sign of a bullish breakout.
