The market’s leading cryptocurrency, Bitcoin (BTC), has recently attempted to stabilize around $112,000 after experiencing a sharp decline to $110,000 on Sunday, meaning a 10% drop from all-time high (ATH) levels.
Ahead of the Federal Reserve’s (Fed) September meeting, market expert Doctor Profit highlighted on X (formerly Twitter) the upcoming implications and the most important technical indicators that paint a bleak picture for Bitcoin (BTC) and the broader market.
Fed Rate Cut To Trigger A New Market Correction?
Doctor Profit emphasized that the current market environment is markedly different from previous cycles. He believes that the anticipated rate cut by the Fed next month could initiate a robust correction in both stocks and cryptocurrencies.
According to him, the first significant cut typically brings uncertainty, leading to divergent opinions among investors, and he predicts that this time will be no exception.
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Turning to Bitcoin’s technical indicators, the outlook appears bearish. The expert noted a substantial Chicago Mercantile Exchange (CME) gap around the $93,000 mark that needs addressing, with most liquidity concentrated in the $90,000 to $95,000 range.
The charts indicate a potential correction, highlighted by a double top formation and declining trading volume. Notably, Doctor Profit has asserted that the last price surge that saw BTC reach $124,000, was largely driven by futures rather than spot market activity, reinforcing the bearish sentiment.
Bitcoin Price Forecast
Market psychology plays a crucial role in this analysis. On-chain metrics and sentiment indicators reveal that retail investors often buy high and sell low.
The expert disclosed that during Bitcoin’s last dip from $110,000 to $98,000 between May and June of this year, it was primarily institutional investors who capitalized on the lower prices, while retail buyers missed out.
As prices climbed, retail investors entered the market at higher levels, Doctor Profit added, which could lead to a shakeout as Bitcoin approaches the critical liquidation zone of $90,000 to $95,000.
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Beyond Bitcoin’s price action, Doctor Profit warns that the current market sentiment reflects a false sense of optimism, suggesting that the prevalent belief in a sustained altcoin season is misguided. He cautions that as enthusiasm grows, larger players may begin to offload their positions, leaving retail investors exposed.
Looking ahead, he forecasts a potential surge in Bitcoin prices towards $145,000 to $150,000, which could potentially mean a 34% increase from current levels. The expert also expects Ethereum (ETH) to reach between $7,000 and $8,000 following the September correction.
When writing, Bitcoin trades at $112,560, recording a 6% drop in the fourteen-days time frame. Ethereum on the other hand, has continuously positioned among the market’s top performers with a 5% surge during the same period.
Featured image from DALL-E, chart from TradingView.com