Why Bitcoin (BTC) Could Rally to $70K, According to Glassnode Founders

According to Glassnode founders Jan Happel and Yann Allemann, Bitcoin [BTC] was in a great position to retest $70K.

Glassnode founders Jan Happel and Yann Allemann, who go by Negentropic on X, shared their crypto insights on BTC’s potential to retest $70K.

According to them, speculators who are planning to short the crypto at $68K or $69K might face heavy liquidations.

“Shorts eyeing this long-term #Bitcoin compression range will be liquidated once the $68k to $69k level is surpassed…”

The compression channel is part of the megaphone pattern that was highlighted as BTC continues to consolidate after hitting a new high in March.

Why BTC might rally to $70K

As highlighted by the Glassnode founders, via their crypto insights platform Swissblock, BTC could hit $70K due to the current low-risk levels and an uptick in network activity.

The founders also noted that BTC’s rally to $64K flipped the asset’s risk profile from high to low.

Interestingly, the recoveries in May, June, and July occurred after the asset flashed a low-risk profile. Hence, the trend could repeat and push the crypto to $70K.

Furthermore, Swissblock pointed out the improving Bitcoin network growth, which could confirm the sustainability of the uptrend.

“The network growth is resuming its upward trajectory and even challenged the highs seen in July, where we not only witnessed notable growth but also the breaking of a downward movement that had occurred post-halving.”

While network liquidity was lagging behind growth, the analytics platform highlighted signs of a slow improvement that could benefit BTC.

Additionally, the negative funding rates in BTC perpetual markets could amplify the rally, according to Swissblock.

“The funding rates of perpetual futures have not only remained negative since our last reading but have also increased in magnitude: Highly unusual for times of bullishness. This positioning is such that it may fuel an even stronger rise in case of their liquidations.”

The low BTC funding rates were linked to the prevalence of US spot BTC exchange-traded funds (ETFs), which have a higher price impact compared to derivative markets.

Moreover, Swissblock speculated that the recent staking of BTC on the Babylon staking platform might have contributed to the negative funding rates.

VanEck also shared a similar outlook for the recovery, highlighting a comparable risk appetite for BTC during previous market recoveries.

However, a CryptoQuant analyst warned that the price of BTC is being driven by over-leverage (Open Interest rates), which could lead to a price reversal as seen in past trends.

“Same setup again? Open Interest went up harder than Bitcoin price. Last two time, it was a quick win.”