Bitcoin Is Approaching a Historic Support Zone, but a Quick Rebound May Not Follow
Bitcoin is approaching the lower boundary of a long-term price model that Fidelity has tracked since 2015. This level previously coincided with major market bottoms, so analysts view it as a possible accumulation zone. The model in question is the power law model used by Fidelity’s Director of Global Macro Jurrien Timmer. It presents Bitcoin’s entire price history on a logarithmic chart and consists of three main curves an upper resistance line, a middle trend line and a lower support line. The lower boundary of the model has previously marked significant price lows. On Timmer’s latest chart, it is located near $58,000, while Bitcoin is trading at approximately $62,700. This means the cryptocurrency is gradually approaching a zone where long-term investors previously began buying the asset more actively.
An additional indicator in the model tracks how far the current price has moved away from the middle trend line. That deviation now stands at around minus 56%. On Fidelity’s chart, this level is marked as an accumulation zone. Similar readings were observed near Bitcoin’s lows in 2018 and 2022. However, this does not mean that history will repeat itself in exactly the same way or that the price has already reached its final bottom.
Timmer is not yet declaring that the decline is over. In his assessment, the market currently lacks a clear catalyst capable of triggering a rapid recovery. One reason for the weakness is the disappearance of the speculative premium that previously helped Bitcoin rise above $120,000. Investors who bought the cryptocurrency in search of quick gains have largely already left the market. Global liquidity remains another important factor. Growth in the global money supply is slowing, and without an inflow of new capital, it is more difficult for risk assets to return to sustained growth. Timmer believes a change in direction may begin only after liquidity recovers. Until then, Bitcoin may remain near the lower boundary of the model for several months rather than rebound sharply immediately after touching support. The direction of speculative capital has also changed noticeably. Fast money first moved from Bitcoin into gold and then partially shifted from gold into semiconductor stocks. This sector is currently attracting considerable investor attention.
Bitcoin’s 52-week ratio to gold has also fallen sharply, to approximately minus 100%. This indicates that gold performed much more strongly than the leading cryptocurrency over that period. Approaching long-term support may be an important signal for investors assessing Bitcoin over a multi-year horizon. At the same time, an accumulation zone does not guarantee rapid growth. The price may continue moving near current levels for some time or fall closer to the support line. Its further direction will depend not only on the technical model, but also on global liquidity, investors’ willingness to return to risk assets and the emergence of a new market catalyst.
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