Analyst Raises Red Flag On Bitcoin Rally, Predicts Imminent Retreat After 35% Spike
November 02 2023 - 5:00PM
NEWSBTC
As Bitcoin (BTC) continues to consolidate above the $34,000 mark,
aiming to surpass and reclaim its yearly high, theories suggest
that a retracement may follow the current upward spike in the
coming weeks. On this matter, the renowned crypto analyst
known by the pseudonym “Crypto Soulz” recently shared insights on
the potential short-term retracement for Bitcoin in a recent post
on X (formerly Twitter). BTC’s Local Top At $36,000 Signals
Potential Reversal According to Crypto Soulz, a key resistance
level for Bitcoin is identified at $37,370. The analyst suggests
that this resistance level will not likely be retested from the
current position. Additionally, Soulz highlights that
liquidity has been absorbed around $36,000, which he considers a
“trigger” for taking short positions. The analyst points out that
the local top for BTC was observed at $36,000, where a long wick
was formed, followed by a retracement. This price action is seen as
a potential indication of a reversal. Related Reading: Shiba Inu
volume Gains Momentum Moreover, Crypto Soulz emphasizes using
on-chain data as a confluence for BTC positions. Soulz highlights
that the spot market showed an uptrend before the perpetual futures
contracts followed suit. The spot order book (OB) is stated
to be increasing but expected to decrease, along with the perpetual
market. If $36,000 indeed serves as a local top, the analyst
suggests that both spot and perpetual should subsequently decrease.
Furthermore, Soulz highlighted that BTC successfully broke through
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 pools, as seen in the chart above:
the first at $33,000, which he considers its initial target, and
the second at $31,000, where a slight bounce may occur. Bitcoin
Potential As Store Of Value In another development, Jurrien Timmer,
Fidelity’s Director of Global Macro, delved into the
characteristics of Bitcoin and its potential to serve as a store of
value and hedge against monetary debasement. Drawing parallels to
gold, Timmer 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-bust cycles,” much like its previous
market behavior. However, he also emphasized Bitcoin’s evolving
role as a commodity currency that aspires to be a store of
value. Furthermore, 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 exhibited strength and gained
market share. These periods coincided with structural regimes
marked by high inflation, negative real rates, and excessive money
supply growth. Related Reading: Cardano November Momentum –
An Over 40% Increase In The Cards? Timmer hinted that Bitcoin, with
its potential to serve as a hedge against inflation and debasement,
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 contender
in the store of value space. Currently, BTC is trading at $34,700,
reflecting a 1.5% increase over the past 24 hours as it persists in
reaching the $35,000 mark. Featured image from Shutterstock, chart
from TradingView.com
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