Bitcoin’s (BTC) price increased 4.5% over the past day, surpassing $106,500 amid speculation that the ongoing standoff in Washington regarding government shutdowns could be resolved soon.

Even though there are signs of a recovery in the market and Bitcoin’s sustained position above the Golden Line, a prominent analyst has suggested that a major downturn is possibly imminent.

Upcoming Major Decline?

Crypto analyst Doctor Profit indicated that Bitcoin is currently resting on a crucial support level, noting that it has not breached the Golden Line since the bull market commenced in March 2023. This line approximately sits at $99,200, which is just below the key psychological barrier of $100,000.

He mentioned that historically, Bitcoin has consistently bounced back from this threshold during the weekly timeframe without closing beneath it. If Bitcoin were to close below this mark, it could indicate a reversal in bullish momentum, as this support line serves as a key indicator of market trends.

Despite having traditionally bought more Bitcoin at the Golden Line, Doctor Profit expressed hesitance this time, predicting that Bitcoin might eventually fall below this key support.

Yet, he acknowledged that for the price to drop, significant selling pressure would be necessary and remarked that Bitcoin has rebounded off the Golden Line once more.

While he maintains a bearish outlook, he affirmed that he still holds shorts from the range of $115,000 to $125,000, adding that a regular decline below this line is simply a matter of time.

Bitcoin Chart

Liquidity Concerns

There is a significant liquidity zone between $116,000 and $117,000, where further positions may be added if the price revisits. This scenario indicates potential market manipulation in the near future, aimed at creating additional liquidity before any downward movement occurs.

Leverage has surged notably this week, predominantly in long positions on altcoins, suggesting a typical scenario ahead of a large market pullback.

“Market makers are setting traps before the next downturn. Take it easy and avoid over-trading.”

Quick Fade of Recent Rally

Matrixport has also highlighted a potential oversold situation. Their analysis indicates that Bitcoin’s RSI has recently fallen to 35, a level historically associated with buyers returning to the market. Despite the emergence of short-term catalysts, like suggestions from Donald Trump concerning possible stimulus payments and a resolution to the shutdown, Matrixport warns that these may not be enough to fully recuperate investor confidence.

In conclusion, there has been notable selling pressure indicated by ETF data with outflows recorded in the last week, signaling a cautious stance from institutional capital. These elements suggests that a sustained recovery may still be distant.