Bitcoin (BTC), the leading cryptocurrency in the market, has once again surpassed the $87,000 mark this Sunday. This comes after a healthy correction earlier this month which saw the prices drop to $74,000, an event that was predicted and explained by prominent crypto analyst Doctor Profit on the social media platform X (formerly Twitter).
In his analysis a month ago, Doctor Profit had outlined two potential scenarios for Bitcoin’s price movement. The first scenario, which has since played out as he predicted, was a healthy correction that saw prices drop to a range between $70,000 and $74,000. The second scenario he explored was a more severe “Black Swan” event, wherein Bitcoin prices could potentially plummet to the range of $50,000 to $60,000.
Doctor Profit had identified a critical threshold during this analysis, dubbed the “Golden Line,” currently situated at $77,000. This level has demonstrated resilience since the start of the Bitcoin bull run in early 2023. As long as Bitcoin’s price remains above this line, Doctor Profit believes the possibility of a crash scenario is unlikely.
However, the crypto analyst also pointed out that Bitcoin is currently facing resistance at the “Hammer Line,” another critical level. In the past, each time Bitcoin’s price approached this line, it faced immediate rejection. Despite this, Doctor Profit has prepared for two potential scenarios, thanks to the strong support at the Golden Line.
If Bitcoin succeeds in breaking above the Hammer Line, Doctor Profit plans to close his short position from $90,000 and retain his spot position acquired at $77,000. If Bitcoin drops to the $77,000 level, he intends to purchase more, with limit orders already placed to leverage this price point.
Looking forward, Doctor Profit forecasts that Bitcoin will likely continue to trade sideways within the range of the Hammer Line and Golden Line, specifically between $77,000 and $85,200. However, with Sunday’s spike, there could be a brief breach of the Golden Line, contingent on a consolidation above this point.
Bullish triggers on the horizon include potential agreements between the US and China, possible Federal Reserve rate cuts, and an increase in M2 liquidity. In the mid to long term, Doctor Profit believes that Bitcoin’s breakout above the Hammer Line is more likely than a fall below the Golden Line. He warns against trading within the risky region between these two critical levels, calling it a “forbidden zone.”
On trading just above $87,200, BTC registers a nearly 4% surge in the weekly time frame. A breakout above the Hammer Line could signal the end of the correction and a renewed climb towards new all-time highs, while a breakdown below the Golden Line could imply a significant shift in market sentiment and the onset of a deeper correction.
Featured image from DALL-E, chart from TradingView.com.
