Bitcoin Nears $70K as On-Chain Activity Hits Yearly High: Can the Rally Sustain?

Bitcoin Challenges $70K as On-Chain Activity Hits Yearly High

After weeks of consolidation, Bitcoin has once again surged toward the $70,000 psychological resistance. Although it has not yet firmly held above this level, the price has hovered near this barrier for several days, while on-chain active addresses have reached a yearly high. Market sentiment has shifted from cautious观望 to active testing, prompting investors to question: Is the driving force behind this rally sustainable?

Technical Analysis: Logic of Breaking Key Resistance

From a technical perspective, the $70,000 level is not only a psychological round number but also a key Fibonacci retracement level since the March 2024 all-time high. Previously, Bitcoin formed a solid support base by repeatedly bottoming in the $60,000 to $65,000 range. According to TradingView data, the daily MACD has formed a golden cross above the zero line, and the RSI (Relative Strength Index) has rebounded from oversold territory to a neutral-to-bullish range, indicating that bullish momentum is building.

Notably, this breakout is not a sharp one-way surge but a "stepwise" increase with rising volume. Each price pullback near $68,000 has seen significant buying support, suggesting strong institutional interest in defending this area. If Bitcoin can firmly hold above $70,000, the next resistance level would be around $75,000. Conversely, repeated failures to break through could trigger profit-taking from short-term traders, leading to a retest of the $65,000 support.

Macro Capital Flows: Fed Policy Shift Expectations and ETF Inflows

On the macro front, market expectations for a Fed rate cut this year have intensified. According to the latest Fed statement and CME FedWatch data, the probability of a 25-basis-point cut in September has exceeded 60%. A weakening U.S. dollar and falling Treasury yields provide liquidity support for risk assets. Bitcoin, as "digital gold," has become more attractive to macro capital under easing expectations.

Meanwhile, U.S. spot Bitcoin ETFs have turned net positive again in mid-June after net outflows in May. According to SoSoValue data, net inflows over the past week totaled hundreds of millions of dollars, with major issuers like BlackRock and Fidelity contributing the bulk. Continued institutional inflows not only provide incremental buying pressure but also reinforce the narrative of "compliance and mainstream adoption."

On-Chain Data: Active Addresses Hit Yearly High, But Caution Warranted

On-chain activity is a core metric for assessing network usage. Glassnode data shows that Bitcoin's active addresses have climbed to their highest level this year, with daily active addresses briefly exceeding 1 million. This is often seen as a bullish leading indicator—when price and activity rise together, it typically signals new user adoption and strong on-chain transaction demand.

However, on-chain data also flashes some warning signs. Exchange Bitcoin balances continue to decline, indicating that long-term holders prefer to accumulate rather than sell, which reduces selling pressure. But the proportion of short-term holders (holding less than 155 days) has increased, with their cost basis concentrated in the $65,000 to $68,000 range. If the price falls below this zone, it could trigger panic selling. Additionally, Bitcoin futures funding rates have turned positive and risen slightly, suggesting increased leveraged long sentiment. A sudden negative event could amplify volatility due to high leverage.

Sustainability Analysis: Bullish and Bearish Factors Intertwined

Overall, the driving forces behind this rally come from three main areas: trend traders chasing after the technical breakout, institutional allocation driven by improved macro liquidity expectations, and real demand reflected in rising on-chain activity. These factors have created a short-term resonance, but sustainability remains uncertain.

Positive factors: Continued ETF inflows would provide stable incremental capital; if the Fed formally begins a rate-cutting cycle, it would further lower risk-free rates, enhancing Bitcoin's relative appeal; and the 2024 halving event, now months past, is gradually tightening supply.

Risks: Global regulatory uncertainty remains the biggest variable, especially the SEC's decision on Ethereum ETFs, which could impact the entire crypto market's regulatory sentiment. Geopolitical risks and sudden tightening of dollar liquidity could also disrupt the current rally. On-chain data shows a rising share of speculative short-term capital, indicating potential overheating, and the risk of a correction cannot be ignored.

In summary, the battle at the $70,000 level is not just a price struggle but a test of market confidence and fundamental logic. If the macro environment and capital flows continue to support, Bitcoin could embark on a new upward cycle. Conversely, if key support is lost, it may revert to range-bound trading.

Risk Warning

The above content is for reference only and does not constitute investment advice. The cryptocurrency market is highly volatile, and prices may fluctuate significantly due to policy, market sentiment, technical risks, etc. Investors should make independent decisions based on their own risk tolerance and bear the corresponding risks.