Bitcoin (BTC) continued its upward trend following the Federal Reserve’s rate cut last Wednesday. The leading crypto asset is currently trading at $63,509 and has risen nearly 10% in the past seven days.
With rising demand and improving market sentiment, the King coin could reach a two-month high of $69,000. This analysis delves into the key factor contributing to this potential surge.
Bitcoin Miners may be the key to success
BeinCrypto’s assessment of Bitcoin’s Puell Ratio suggests the leading coin may be poised for an extended rally. For the first time since the end of the 2022 bear market, this metric, which measures the profitability of Bitcoin miners, reached the green zone of 0.5.
When the Puell Multiple BTC ratio exceeds 4, the market is said to be in the “red zone”, where miners are making significant profits. This often signals a market top has been reached and is characterized by increased selling pressure, causing the price to decline.
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Conversely, when a Puell Multiple coin enters the “green zone”, mining profitability is significantly lower than usual. This phase often results in prices moving upward as these unprofitable conditions force miners to reduce or cease operations. As a result, the reduction in BTC supply increases its value.
In a recent blog post, CryptoQuant member Darkfost confirmed this.
“Historically, reaching the green zone was accompanied by an upward price movement. Conversely, reaching the red zone usually precedes a downward market movement,” the analyst noted.
Bitcoin’s positive funding rate since September 15 is another bullish indicator that its price may continue to rise. At the time of publication, a coin’s funding rate, which is a periodic fee paid to ensure its contract price remains close to its spot price, was 0.005%.
A positive funding rate suggests that most traders expect the price to rise, resulting in more demand for long positions than for short positions.
BTC price forecast: $69,000 inevitable if history repeats itself
If history repeats itself and the Bitcoin Puell Multiple readings hold true, the leading cryptocurrency is likely to witness an uptrend, potentially heading towards resistance at $67,078. A successful break above this level could pave the way for Bitcoin to reach $69,000, a price it last reached in July.
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However, if the expected accumulation does not materialize and selling pressure increases instead, Bitcoin’s price could fall to $54,672.