Bitcoin’s recent stabilization above $80,000 has sparked intense debate among analysts, with market expert Doctor Profit identifying two potential black swan scenarios that could significantly impact BTC’s price trajectory. Recent market data showing a 35% crash in Bitcoin open interest to $37B adds weight to these bearish concerns.
Understanding the M2 Money Supply Impact
Doctor Profit’s analysis centers on the crucial relationship between Bitcoin’s price and M2 money supply dynamics. Unlike traditional markets, which typically show a 6-month lag in response to M2 changes, Bitcoin exhibits more immediate reactions to liquidity shifts.
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Two Critical Bearish Scenarios
The analysis outlines two potential bearish scenarios:
- Scenario 1: A controlled decline to the $70,000-$74,000 range
- Scenario 2: A severe black swan event pushing prices toward $50,000
Technical Analysis and Price Targets
The weekly EMA50, dubbed the ‘Golden Line,’ has proven crucial in recent price action. While some analysts maintain bullish targets above $100K, Doctor Profit suggests preparing for potential downside risks.
Market Outlook and Trading Strategy
Despite short-term bearish scenarios, the long-term outlook remains constructive, with potential price targets between $120,000-$140,000 by mid-2024. Current market conditions suggest:
- Support level: $80,000
- Critical resistance: $87,400
- Key accumulation zone: $70,000-$74,000
FAQ Section
What could trigger a Bitcoin black swan event?
Potential triggers include regulatory crackdowns, major exchange failures, or significant macroeconomic shocks.
How low could Bitcoin go in a worst-case scenario?
According to Doctor Profit’s analysis, a severe black swan event could push prices toward the $50,000 region.
When might the bull market resume?
The analysis suggests a potential resumption of bullish momentum around May or June 2024.
At time of writing, BTC trades at $84,000, showing 3.5% and 12% losses over 14-day and 30-day periods respectively.