Traders say Bitcoin run to $44K may be a relief bounce, citing a repeat of December’s ‘nuke’
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Traders say Bitcoin run to $44K may be a relief bounce, citing a repeat of December’s ‘nuke’

The last time Bitcoin saw a run-up like this was in December of 2018, when it surged from $3K to nearly $20K. This year’s rally may be preparing for an imminent nuke, traders say.

The “fidelity says buy bitcoin” is a report from the Fidelity Investment company, which says that Bitcoin’s price run to $44K may be a relief bounce. The company also cites a repeat of December’s “nuke” as an indicator of what may happen in the future.

Despite the fact that Bitcoin (BTC) rose above $44,000 on the strength of US inflation statistics, traders do not believe that the price will continue to rise.

Data analyst Material Scientist cautioned that considerable downside to Bitcoin price movement may yet occur in a debate on Twitter on January 12.

“We’ll wait now”

Although BTC/USD has strengthened after bouncing around $39,600, the majority of experts are still unconvinced that the decline in general has finished.

Even when market prices temporarily surpassed $44,000, those voices of skepticism persisted after U.S. inflation figures for December showed a 7% year-over-year increase.

Order books are the source of the issue for material scientists. Since bids have vanished below spot, the situation is not favorable for bulls if resistance later rises directly aloft.

That identical situation occurred in late November, when Bitcoin achieved its all-time highs of $69,000, and the outcome was a sharp decline down below $50,000.

“The last of the offers was just withdrawn. We either see the same scenario as in late November (drawn bids with stacked requests a few days later) or they have finished stockpiling and are now chasing using liquidity “He said.

“Now we wait.”BTC/USD buy/ sell level heatmap (Binance) showing November bid and ask behavior. Source: Material Scientist/ Twitter

It is now time to “pay closer attention” to the market setting, Material Scientist noted. If that is not the case, then a “relief bounce” may continue.

Open curiosity worries analysts

Others echoed their appeal for caution on the price trend in the short future.

Related: Bets preferring a greater “short squeeze” for BTC push Bitcoin back up to $42,000

The absence of a liquidation cascade like the one from December worried analyst William Clemente.

I need a liquidation cascade, okay? I monitor open interest daily, and it is increasing. I check my OI every day; it is high. Man, I can’t stand it any longer. It is what it is, but I need a cascade of liquidation. Can market makers take any action?

By Will Clemente on January 12, 2022 (@WClementeIII).

How high Bitcoin can soar — or plummet — before making a definitive move was the issue since a cascade might go either way.

How much higher must Bitcoin rise before investors who were holding out for $30,000 begin to FOMO into the market in large numbers, causing a short squeeze? Digital Assets Data’s CEO, Mike Alfred, continued. 

The “bitcoin short squeeze” is a term that refers to the phenomenon where traders say bitcoin may be in for a relief bounce, citing a repeat of December’s ‘nuke’.

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