Bitcoin (BTC) may have risen to $ 44,000 thanks to US inflation data, but according to traders, there is little hope for a sustained recovery.
In a Twitter discussion January 12, data analyst Material Scientist warned that significant downside may still return to Bitcoin’s price action.
“Now we wait”
Despite showing strength since bouncing off $ 39,600, the BTC / USD pair has yet to convince most analysts that its overall downtrend is over.
After US inflation data hit 7% year-on-year in December, those voices of doubt continued, even as spot prices briefly topped $ 44,000.
For Material Scientist, the problem lies in the order books. Offers have disappeared below the spot, and if resistance subsequently strengthens, the outlook is not good for the bulls.
At the end of November After Bitcoin hit the current all-time highs of $ 69,000, exactly that phenomenon occurred, and the result was a rapid drop below $ 50,000.
“The rest of the offers have just been withdrawn. Either they have finished accumulating and use the liquidity for follow-up now, or we see the same as at the end of November (offers drawn + requests accumulated a few days later),” he summarized.
“Now we wait.”
If that wasn’t the case, a “rebound of relief” could persist, but regardless, now is the time to “pay more attention” to market shaping, added Material Scientist.
Open interest scares analysts
Others followed suit, asking for caution about the short-term price trajectory.
For analyst William Clemente, the lack of a liquidation cascade, like the one in December, was cause for concern.
Ok ok ok, I need a liquidation cascade. Every day I check open interest and it’s rising. Every day I check OI, high OI. I can’t take this anymore man. It is what it is but I need a liquidation cascade. Can market makers do something ??
– Will Clemente (@WClementeIII) January 12, 2022
Ok ok ok I need a liquidation cascade. Every day I check open interest and it’s going up. Every day I monitor the OI, the peak of OI. I can’t take this anymore man. It is what it is but I need a cascade liquidation. Can market makers do anything?
With a waterfall that has the potential to go in either direction, the question was how far Bitcoin can rise or fall before a decisive move occurs.
“How much higher must Bitcoin go before the people who were expecting the $ 30,000 level start entering the market en masse and trigger a bearish contraction?” Mike Alfred, CEO of Data Resources Digital Assets Data, added.