Fidelity's Timmer Says Bitcoin Testing Long-Term Support at $58,237
Forecast Trend Report by Period
Bitcoin is approaching a key support level in its long-term price trend, and a sustained rebound may require a recovery in global liquidity, crypto media outlet U.Today reported.
Jurrien Timmer, Fidelity's global macro director, said Bitcoin is facing a critical test near its long-term algorithmic support line, according to U.Today on July 3.
Timmer said speculative short-term capital is moving out of alternative stores of value such as Bitcoin and into high-growth technology stocks. U.Today described the shift as money flowing from alternative stores of value into a surging tech sector.
He said Bitcoin is nearing its historical baseline, but the current macro environment lacks a strong catalyst for a rebound.
Timmer's reference point is the Bitcoin power-law model. The model plots Bitcoin's long-term price path on a logarithmic chart and shows an upper resistance line, a middle trend line and a lower support line.
Bitcoin's lower power-law support line is currently around $58,237. U.Today said $60,000 marks both a psychological and technical inflection point for the cryptocurrency.
Bitcoin has approached this long-term support line during past bear-market bottoms. In 2015, the model's support level was about $252 and the actual price fell to $230. In 2018, Bitcoin bottomed at $3,204 against a support level of $2,521. In 2022, it hit a low of $16,366, near the model's $15,006 support line.
Even as Bitcoin has moved closer to long-term support, its premium above the model's structural floor has narrowed sharply. U.Today said that premium widened rapidly during past bull markets but has now been largely exhausted.
The report said the speculative premium that had pushed Bitcoin above $120,000 has disappeared. It also cited slowing growth in global money supply as a headwind.
Timmer said Bitcoin has fallen near the $58,237 support level, but stopped short of calling an immediate bottom. U.Today said Bitcoin could remain near that support line for an extended period before a genuine reversal takes hold.
Bitcoin may continue to trade near its long-term support until the macro backdrop improves. U.Today said a meaningful trend reversal may come only after global liquidity recovers and risk appetite strengthens.
