Bitcoin (BTC) prices have risen 4.5% over the past day, surging above $106,500 amid optimism that the Washington government shutdown impasse may finally be resolved this week.
Despite the overall market recovery and Bitcoin maintaining its golden line, top analysts opined that a brutal collapse is on the horizon.
Is a major dump arriving?
Cryptocurrency analyst Dr. Proffitt said that Bitcoin is currently located at a historical support point, noting that it has never lost this golden line level since the start of the bull market in March 2023 and is currently sitting around $99,200, just below the psychological barrier of $100,000.
They stated that on the weekly time frame, BTC has always rebounded above this line and has never closed below it. Therefore, a weekly close below this level would be a strong argument for the demise of bullish momentum, as this level is one of the most important bullish-bearish indicators to consider.
Dr. Proffitt said that while he has always been buying more Bitcoin at the golden line throughout the bull market and historically it has worked well for him, he is not buying at the golden line this time and believes that the crypto asset will eventually lose this important level.
However, the analyst said that strong selling pressure is needed to break out of this level, and although he acknowledged that BTC has rebounded from the golden line again, he said this does not change his macro-bearish view. While he confirmed that he continues to hold short positions in the $115,000 to $125,000 area, he said it was only a matter of time before the stock fell below the golden line.
You may also like:
- James Wynn liquidated 12 times in 12 hours as Bitcoin price soars to over $106,000
- Robert Kiyosaki sets huge BTC, ETH price targets after warning of impending crash
- Digital asset treasury companies will pour $42.7 billion into cryptocurrencies in 2025, with $22.6 billion spent in the third quarter alone
There is also a large liquidity cluster around $116,000 to $117,000. If the market revisits the area, analysts will likely add more shorts. Further manipulation moves aimed at increasing liquidity on the downside are likely in the coming days. Analysts said market makers were not ready to send Bitcoin to the next leg and wanted to increase liquidity first, and that seems to be working.
Leverage has increased significantly this week, especially on long altcoin positions, and this type of environment is typical before the next big drop.
“Market makers are setting trap after trap before lowering the next leg. Enjoy your tea, hold on, don’t overtrade.”
rally made fade fast
Matrixport also noted that an oversold setup may be underway. According to the latest commentary, BTC’s RSI has recently fallen to 35, which has historically been the zone where tactical bullish buyers start to re-enter. Despite short-term triggers such as a resolution to the US government shutdown and comments from Donald Trump hinting at the possibility of $2,000 stimulus payments to Americans, it remains unclear whether this will be enough to reignite risk appetite, Matrixport warned.
ETF data has also shown outflows over the past week, indicating that institutional investors may be holding back for the time being and that these catalysts alone may not be enough to spur a permanent reversal.
