Bitcoin returns to $42K as bets start favoring ‘short squeeze’ higher for BTC

Bitcoin has been on a hellish ride these past few months, losing over 75% in the past year. Bitcoin was an investment created to escape financial structures through decentralization and autonomy from centralized institutions like banks or governments, but those are still some of its biggest proponents as they see it leading to more freedom for people around the world who need a global currency that doesn’t require any third party oversight. With BCH trading at $1K BTC right now many pundits believe this is another short squeeze opportunity where investors pour their cash back into BTC as it finally begins looking like an attractive option again.

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The “bitcoin movement today” is a term used to describe when the price of Bitcoin starts to rise in anticipation of an upcoming short squeeze. This time, it has been predicted that the market will be favoring a higher price for BTC.

As predictions of a new “short squeeze” grew, Bitcoin (BTC) broke past $42,000 on Jan. 11.

1 hour candle chart of BTC/USD (Bitstamp). TradingView is the source of this information.

“Reasonably probable” short-term squeezing

BTC/USD rebounded from Monday’s fall to $39,600, its first crossing of the $40,000 level since September, according to data from Cointelegraph Markets Pro and TradingView.

While short-term positive forecasts were glaringly lacking on the day, attention was focused on the possibility of another “short squeeze” in derivatives markets.

With open interest at all-time highs despite the drop and sentiment plainly favoring additional downside, an unexpected upswing might “squeeze” short bets while giving bulls some comfort.

Such an event is long overdue, according to the current issue of Glassnode’s weekly newsletter, The Week Onchain. Longs have been hurting nearly nonstop since November’s all-time highs of $69,000, and “squeezes” happen when the market isn’t expecting a specific conclusion.

“Short traders who haven’t been penalized for taking on more risk may find themselves targets for a near-term squeeze,” the researchers predict.

According to Glassnode, such an incident might be compounded by “tepid” demand for spot BTC and futures open interest leverage, which is reaching 2% of the Bitcoin market size.

“Along with highly oversold signs in on-chain spending activity,” the newsletter added, “this implies a short squeeze is really a pretty possible near-term resolution for the market.”

1641894009_254_Bitcoin-returns-to-42K-as-bets-start-favoring-short-squeezeAnnotated graphic of Bitcoin futures open interest leverage ratio. Glassnode is the source of this information.

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There’s a long for every short.

Analysts contemplated solutions to the large open interest being eliminated through another leg down to $30,000 in the meanwhile.

5 things to watch in Bitcoin this week: ‘Most optimistic macro backdrop in 75 years’

Despite the fact that no “wipeout” of open interest has yet occurred, prominent Twitter account Credible Crypto suggested on the day that a surprise upward move might be the event that resets market composition.

“What if the massive OI wipeout that everyone is anticipating occurs as a result of a squeeze to the upside rather of a move lower?” In reaction to data from colleague analyst William Clemente, he questioned.

“Happened in August ‘21 as we moved off the 30K bottom. Think we probs see that play out again. Bears bout to be wiped clean.”1641894009_910_Bitcoin-returns-to-42K-as-bets-start-favoring-short-squeezeBitcoin futures open interest chart (Binance). Source: Coinglass

$40,000 has formed a substantial price zone from numerous points during the previous twelve months, according to Cointelegraph.

Bitcoin is back over $42K, as the market starts to favor a “short squeeze” or higher price for Bitcoin. Reference: bitcoin opening price today.

Related Tags

  • bitcoin fills $42 k december price wick as analyst says party just getting started
  • why has bitcoin dropped today
  • bitcoin price news cointelegraph
  • btc short
  • bitcoin value news

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