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.
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…
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