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

Bitcoin
(BTC)
may
have
rallied
to
$44,000
on
the
back
of
United
States
inflation
data,
but
according
to
traders,
there
is
little
hope
of
a
sustained
comeback.

In
a
Twitter
discussion
on
Jan.
12,
data
analyst
Material
Scientist

warned

that
a
significant
downside
may
still
return
to
Bitcoin
price
action.

“Now
we
wait”

Despite
showing
stength
since
bouncing
at
$39,600,
BTC/USD
has
yet
to
convince
most
analysts
that
its
overall
downtrend
has
ended.

After
U.S.
inflation
data
came
in
at
7%
year-on-year
for
December,
those
voices
of
doubt
continued,
even
as
spot
prices
briefly
passed
$44,000.

For
Material
Scientist,
the
problem
lies
on
order
books.
Bids
have
disappeared
below
spot,
and
if
resistance
subsequently
strengthens
immediately
overhead,
the
outlook
does
not
bode
well
for
bulls.

In
late
November,
after
Bitcoin
reached
current
all-time
highs
of
$69,000,
that
exact
phenomenon
played
out

and
the
result
was
a
rapid
crash
to
below
$50,000.

“Remainder
of
bids
was
just
pulled.
Either
they’re
done
accumulating
and
use
liquidity
to
chase
now,
or
we
see
the
same
thing
as
in
late
November
(pulled
bids
+
stacked
asks
a
few
days
later),”
he
summarized.

“Now
we
wait.”


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

Should
that
not
be
the
case,
then
a
“relief
bounce”
could
persist,
but
regardless,
it
is
now
time
to
“pay
more
attention”
to
the
market
setup,
Material
Scientist
added.

Open
interest
spooks
analysts

Others
followed
suit
in
calling
for
caution
over
near-term
price
trajectory.



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

For
analyst
William
Clemente,
the
lack
of
a
liquidation
cascade,
such
as
that
from
December,
was
cause
for
concern.

With
a
cascade
having
the
potential
to
go
either
way,
the
question
was
thus
how
far
Bitcoin
can
climb

or
fall

before
a
decisive
move
occurs.

“How
much
more
does
Bitcoin
need
to
go
up
before
people
who
were
waiting
for
$30,000
start
to
FOMO
into
the
market
en
masse
and
trigger
a
short
squeeze?”
Mike
Alfred,
CEO
of
data
resource
Digital
Assets
Data,

asked

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