Currently trading below the $30K mark, Bitcoin has been the subject of intense speculation and predictions as traders and market analysts closely monitor its price movements. A Twitter user known as Doctor Profit has drawn attention with his insights and analysis of the cryptocurrency’s trajectory. With a focus on the vital Weekly Moving Average 200 (WMA200) indicator and liquidity pools, Doctor Profit’s latest analysis has sent ripples through the cryptocurrency community.
According to him, the significance of the WMA200 indicator cannot be understated, as it has historically played a decisive role in guiding major price swings for Bitcoin in the short and long term. However, a notable shift has occurred, prompting Doctor Profit to assess the potential for a wider correction.
Drawing on Technical Analysis (TA), Liquidity Confluence Analysis (LCA), and Psychological factors, Doctor Profit predicted that Bitcoin would likely enter a period of sideways movement, aiming to tap into liquidity pools within a specific price range. Notably, one liquidity pool was already filled at $31,700, in line with his previous forecast. Now, the focus turns to the remaining liquidity pool at $29,000.
An essential aspect of Doctor Profit’s analysis is comparing liquidity on the downside versus the upside. As the cryptocurrency approaches the liquidity pool at $29,000, he noted that more liquidity is concentrated on the downside, indicating a potential bearish sentiment among market participants. Additionally, a concerning development is the loss of the WMA200 on the daily chart, which Doctor Profit deems a negative sign for Bitcoin’s immediate prospects.
Per his analysis, Doctor Profit outlined three key targets to watch out for, each contingent on specific price levels being breached. The first target is the liquidity pool at $29,000, which, if taken out, would likely lead to a retest of the Exponential Moving Average 50 (EMA50) on the daily chart. A decisive close below EMA50 could signal the market’s trajectory towards the second target – a liquidity pool around the $27,000 region, coinciding with the crucial MA200 on the weekly chart.
The third target represents the worst-case scenario, where Bitcoin could potentially plummet to the massive liquidity pool in the $24,000 region. It is important to understand that these “targets” are not rigid price predictions but rather contingent on Bitcoin’s reaction to specific support and resistance levels.
