Crypto Analyst Sounds Bearish Alarm: Bitcoin Could Plunge to $50,000

Bitcoin’s recent dip below $90,000 has sent shockwaves through the market, with on-chain data revealing significant whale sell-offs. This downturn, occurring despite the seemingly bullish news of a proposed Strategic Bitcoin Reserve (SBR) signed by Donald Trump, has prompted renowned crypto analyst, Dr. Profit, to issue a stark warning.

In a comprehensive X post, Dr. Profit details his concerns about an impending major Bitcoin correction, arguing that current market conditions signal the beginning of this cycle’s first significant downturn. He highlights the SBR as a pivotal factor influencing his bearish shift, explaining that while retail investors perceive it as revolutionary, large players have already factored its impact into their strategies.

The SBR: A Misleading Narrative?

Dr. Profit’s analysis suggests that the SBR, rather than driving bullish momentum as many expected, represents a potential catalyst for decline. He asserts that the government’s decision to utilize previously confiscated Bitcoin, rather than making new purchases, has fallen short of expectations and undermined the anticipated buying pressure. The timing of this policy announcement also plays a significant role in Dr. Profit’s prognosis, indicating a shift in market dynamics that points towards a prolonged bear market.

Bitcoin’s Imminent Correction: A 40-50% Drop?

Dr. Profit’s prediction is a significant retracement, estimating a potential 40-50% drop in Bitcoin’s value, aligning with typical bull market corrections where substantial price declines precede new all-time highs. He views the current situation as the culmination of factors leading to this anticipated decline.

He has responded by liquidating 50% of his Bitcoin holdings (initially acquired at $16,000), implementing short positions in the $90,000-$102,000 range. His target profit levels are set at $74,000 (first take-profit), with a complete exit planned around $50,000-$60,000, followed by a full buy-back to double his holdings. This aggressive strategy underscores the gravity of his bearish forecast.

Long-Term Bullish Outlook Remains

Despite this short-term bearish outlook, Dr. Profit remains steadfast in his long-term bullish perspective, predicting an eventual Bitcoin rally to new highs in the $120,000-$130,000 range. This suggests the current correction is a necessary phase within a larger upward trend.

At the time of writing, Bitcoin is trading at $86,530. Stay tuned for further market developments.

Featured image from Unsplash, chart from Tradingview.com