Bitcoin is nearing a key support line under a long-term price model, but it is too early to definitively call a bottom, an assessment said.

CoinPost, a blockchain outlet, reported on Thursday that Julian Timmer (줄리안 티머), Fidelity Investments' global macro director of asset allocation, said bitcoin is approaching its long-term “Power Law” support line.

The “Power Law” Timmer cited is an analytical approach that models bitcoin price movements on a logarithmic chart around three axes: an upper resistance line, a mid trend line and a long-term support line. It is used to gauge long-term price ranges. In Timmer's chart, the current long-term support line stands at about $58,237.

Market attention is focused on the fact that this support line did not break during past downturns. In 2015, the actual low was $230 and the model support line was $252. In 2018, the actual low was $3,204 and the model support line was $2,521. In 2022, the actual low was $16,366 and the model support line was $15,006. In particular, since 2018, the actual lows have all been above the model level.

Fidelity, however, said a rebound is hard to expect based only on an approach to a technical support line. Timmer said short-term speculative money continues to move from alternative stores of value to advanced technology sectors, and that in the current macroeconomic environment there is no bullish catalyst that could serve as a trigger for a turnaround.

A premium indicator at the bottom of the chart also supports a cautious view. The indicator shows how far the market price stands above the support line, and in past bull markets the gap widened sharply. Timmer said the premium is now almost gone. He said the global money supply growth rate has slowed and that the speculative premium that had built up as bitcoin rose above $120,000 has also disappeared.

That leaves liquidity as a condition for further gains. Timmer said an additional supply of global liquidity is needed for a clear break above the support line. He meant that in the current range, it matters more whether conditions emerge to rebuild a premium above the line than the fact that the price has neared the support line.

In terms of market reaction, the long-term support line is being tested again, and the macro environment is increasingly likely to determine the price direction. It is positive that the long-term model has defended the downside several times in the past, but Timmer did not see that as confirming a short-term bottom. He also left open the possibility that bitcoin could remain stuck near the support line until the macro environment improves.

In this situation, the next points to watch in the bitcoin market narrow to two. One is whether the long-term support level around $58,237 holds again. The other is whether a catalyst emerges to revive slowing global liquidity and the vanished upside premium. CoinPost said Fidelity's assessment shows that macro capital flows remain a more important variable than technical downside signals.