Bitcoin is approaching a critical long-term support level, according to Fidelity Investments' director of global macro, Jurrien Timmer. The firm's power law model identifies approximately $56,500 as a possible downside target if another pullback occurs, while current conditions resemble past accumulation phases following major bear markets.
Timmer noted that Bitcoin, trading around $62,685, has moved closer to its power law support line. The model shows the asset about 56% below its median power law trend, a deviation similar to those seen during the 2018 and 2022 bear markets. Additionally, Bitcoin's 52-week Bitcoin-to-gold Z-score has dropped near negative 100%, historically coinciding with periods of market exhaustion. However, Timmer stopped short of calling a definitive bottom, leaving open the possibility of a final decline toward $56,500 before stabilization.
Macro headwinds continue to challenge Bitcoin. Fidelity highlighted slower global money supply growth, rotation of capital into gold and semiconductor stocks, and higher bond yields with delayed rate-cut expectations as factors weighing on speculative demand.
Institutional fund flows showed mixed signals. U.S. spot Bitcoin ETFs recorded $197.4 million in net inflows last week, ending an eight-week withdrawal streak. BlackRock's iShares Bitcoin Trust captured most of the new capital, while the Fidelity Wise Origin Bitcoin Fund, Grayscale Bitcoin Trust, and ARK 21Shares Bitcoin ETF each saw net outflows. Fidelity emphasized that sustained demand, not just technical levels, will drive the next market direction.
