As bitcoin (btc) continues to consolidate above the $34,000 mark, aiming to surpass and reclaim its yearly high, theories suggest that a pullback may follow the current bullish peak. In the next weeks.
On this matter, the renowned crypto analyst known by the pseudonym “crypto Soulz” recently shared insights on bitcoin‘s possible short-term pullback in a recent post on X (formerly Twitter).
btc local high at $36,000 signals possible reversal
According According to crypto Soulz, a key resistance level for bitcoin is identified at $37,370. The analyst suggests that this resistance level will likely not be retested from the current position.
Furthermore, Soulz highlights that liquidity around $36,000 has been absorbed, which he considers a “trigger” to take short positions.
The analyst notes that the local high for btc was observed at $36,000, where a long wick formed, followed by a pullback. This price action is considered a potential indication of a reversal.
Furthermore, crypto Soulz emphasizes the use of on-chain data as a confluence for btc positions. Soulz points out that the spot market showed an upward trend before perpetual futures contracts did the same.
The spot order book (OB) is said to be increasing, but is expected to decrease, along with the perpetual market. If $36,000 truly serves as a local high, the analyst suggests that both the spot and perpetual should decline thereafter.
Furthermore, Soulz highlighted that btc successfully surpassed key technical indicators, such as the 200-day simple moving average (SMA), the 200-week SMA, and the 365-day SMA, which is currently acting as support.
Ultimately, Soulz further states that there is no substantial liquidity available above $38,000. The analyst identifies two liquidity poolsas seen in the previous chart: the first at $33,000, which is considered its initial target, and the second at $31,000, where a slight rebound may occur.
bitcoin‘s potential as a store of value
In another development, Jurrien Timmer, Director of Global Macro at Fidelity, delved into the characteristics of bitcoin and its potential to serve as a store of value and protection against monetary debasement.
Drawing parallels with goldWood highlighted bitcoin‘s “unique attributes” and its ability to potentially gain market share in times of inflation and excessive money supply growth.
Timmer acknowledged that bitcoin had followed a pattern of “boom and bust cycles,” very similar to its previous market behavior. However, he also emphasized bitcoin‘s changing role as a basic currency that aspires to be a store of value.
Additionally, Timmer described bitcoin as “exponential gold,” suggesting that it shares similarities with gold but with additional growth potential.
While gold has traditionally been recognized as a store of value, Timmer noted its limitations as a medium of exchange due to its deflationary nature and lack of efficiency.
Timmer drew attention to historical periods, such as the 1970s and 2000s, when gold showed strength and gained market share. These periods coincided with structural regimes marked by high inflation, negative real rates, and excessive money supply growth.
Timmer hinted that bitcoin, with its potential to serve as inflation hedge and degradation, could play a similar role in such environments.
Considering bitcoin‘s attributes and the changing macroeconomic landscape, Timmer expressed optimism about its potential to join the ranks of gold as a valuable asset.
While acknowledging the volatility and speculative nature of cryptocurrencies, Timmer believes that bitcoin‘s unique characteristics position it as a viable competitor in the store of value space.
btc is currently trading at $34,700, reflecting a 1.5% increase in the last 24 hours as it persists in reaching the $35,000 mark.
Featured image from Shutterstock, chart from TradingView.com
