Autor Cointelegraph By William Suberg

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 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/ TwitterShould 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 analystsOthers followed suit in calling for caution over near-term price trajectory.Related: Bitcoin returns to $42K as bets start favoring ‘short squeeze’ higher for BTCFor analyst William Clemente, the lack of a liquidation cascade, such as that from 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, 2022With 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 in to the market en masse and trigger a short squeeze?” Mike Alfred, CEO of data resource Digital Assets Data, added. 

Bitcoin (BTC) surged almost $1,000 in minutes on Jan. 12 as encouraging signs emerged from exchanges.BTC/USD 1-hour candle chart (Bitstamp). Source: TradingViewData from Cointelegraph Markets Pro and TradingView showed BTC/USD hitting $43,468 Wednesday, its highest since Jan. 6.The pair had been due to continue volatile moves, traders said, with more and more favoring a push higher rather than a renewed downside.This would likely come in the form of a “short squeeze” against latecomer shorters, they argued, and Wednesday’s sudden wick higher appeared to support the theory.Funding rates across derivatives platforms stayed either neutral or negative during the volatility, further hinting that the market had been overly betting on fresh losses.Bitcoin funding rates chart. Source: CoinglassReacting, popular trader and analyst Scott Melker, known as the “Wolf Of All Streets,” reiterated his spot price targets for divesting back out of BTC. A reclaim of higher levels beyond $50,000 would then form a pivot for a market entry, he told Twitter followers.Targets for my leveraged long from $39,800.- 42K ✅- 45.5K- 4.66KI will be 75% out by then, leave the rest to see if we can hit $52K and then reassess.Targets for my spot buys:pic.twitter.com/F1TRGlB3u6— The Wolf Of All Streets (@scottmelker) January 12, 2022In his Tuesday YouTube update, meanwhile, Cointelegraph contributor Michaël van de Poppe flagged $43,000 as a potential springboard for a trip to $46,000, thanks to a lack of resistance in between.“I’ve still got buy orders at $38,000; they will not be getting hit, but I’ve been buying heavily here,” he said.Meanwhile, Wednesday’s upcoming United States consumer price index (CPI) data, due at 8:30 am ET, could provide fresh fuel for the fire should inflation fall outside of expectations.Ether among major altcoin high flyersFollowing on from Tuesday, altcoins capitalized on Bitcoin’s newfound strength.Related: Bitcoin exchange outflows see biggest daily spike since September 2021The top 10 cryptocurrencies by market capitalization added upward of 4% on the day, led by Polkadot (DOT), Terra (LUNA) and Ether (ETH).The latter was up over 5% at the time of writing, heading firmly away from $3,000 support. ETH/USD 1-hour candle chart (Bitstamp). Source: TradingViewPreviously, warnings had come for altcoins across the board, with tokens yet to experience “real pain“ during the current drawdown.

Bitcoin (BTC) investors are voting with their wallets as one-day outflows from major exchanges near 30,000 BTC. Data from on-chain analytics firm CryptoQuant shows that on Jan. 11, 29,371 BTC left exchange order books — the most since Sep. 10.The four-month high in outflows corresponds to short-term optimism returning on Tuesday as BTC/USD bounced and maintained levels above $42,000.The pair subsequently went on to hit local highs of $43,150 before consolidating, this nonetheless a different turn of events to the widely-predicted cascade towards $30,000.While such an outcome remains a topic of debate, buyers seem comfortable entering the market above $40,000.For context, even the bounce which sparked the run to all-time highs at the end of September failed to produce as much buyer uptake as Tuesday.Bitcoin exchange netflow chart. Source: CryptoQuant”Volumes are thin. That means the market can have huge moves up or down easily,” Samson Mow, CEO of Blockstream, commented on the status quo:”Given that we had a big move down already, and everyone is buying like no tomorrow, I’d say the next move is up.”CryptoQuant tracks a total of 21 exchanges for its order book data. Last week, separate data focused on what one analyst described as a “crazy” imbalance between bids and asks, indicating that bears were finally beginning to tire of selling.Buyers get bolderSpot buyers were previously the main cohort missing from interest in BTC at current price levels.Related: Bitcoin returns to $42K as bets start favoring ‘short squeeze’ higher for BTCAs Cointelegraph reported, miners continue to add to their reserves at an increasing pace this year, with long-term holders steadfast in their resolve not to sell.Highlighting a bullish trend in the Bitcoin taker buy/sell ratio, CryptoQuant contributor IT Tech revealed a similar situation unfolding on derivatives markets.The metric refers to the ratio of buy and sell volumes from takers on derivatives platforms. A value below 1 implies bearish sentiment, and while that is currently the case, the direction is up.”If will cross 1 then we should have Bullish sentiment again and it chance to price trend reversal,” IT Tech summarized in one of CryptoQuant’s “Quicktake” posts Wednesday. “Personally I am preparing to final bull run which will come sooner or later.”Bitcoin taker buy/ sell ratio vs. BTC/USD annotated chart (screenshot). Source: CryptoQuant

New data shows that Bitcoin (BTC) miners are hoarding more coins than at any time in the past five months, which could be a fresh signal that the current prices are not for selling.Analyzing its miner net position change indicator on Jan. 11, on-chain analytics firm Glassnode revealed what popular Twitter account Bitcoin Archive described as “massive” accumulation by miners.Miners show no desire to sellBitcoin price may be disappointing spot traders this year, but long-time market participants are anything but concerned.In addition to strong hands or seasoned hodlers, miners are now no exception, increasing their BTC holdings considerably in the first two weeks of 2022.Bitcoin miner net position change annotated chart. Source: Bitcoin Archive/ TwitterThe past five days have each seen more than 5,000 BTC per day land on miners’ books, with accumulation in fact ongoing since before November’s $69,000 all-time highs.Further data from fellow on-chain analytics service CryptoQuant spotlighted the extent to which miners have regained their BTC real estate since May’s China upheaval.Total BTC reserves were 1.859 million BTC as of Monday, the most since a marked reduction at the end of 2020 after BTC/USD passed its previous all-time highs from 2017.Bitcoin miner reserve chart. Source: CryptoQuantHodling the hardest since last JanuaryReturning to strong hands, the proportion of the Bitcoin supply deemed either lost or ferreted away by long-term investors hit a one-year high this week.Related: Bitcoin batters longs as liquidations copy May 2021 run to $30,000Underscoring the conviction of hodlers, 7.27 million BTC is now off the market — possibly forever.The metric also saw a bottom over the summer thanks to the price disruption wrought by China’s ban on mining.By contrast, Glassnode shows, an accumulation trend has been accelerating since $69,000.Bitcoin lost or hodled coins chart. Source: Glassnode

Bitcoin (BTC) fell slightly into the Wall Street open on Jan. 11 after the largest cryptocurrency failed to crack resistance above $42,000, but fresh comments from U.S. Federal Reserve chair Jerome Powell appear to be providing a boost to markets.BTC/USD 1-hour candle chart (Bitstamp). Source: TradingViewBitcoin squares off at supportAccording to Powell, the United States is likely to remain in a low-interest environment for some time, a comment that stocks and risk-on assets like cryptocurrencies seem to appreciate.Data from Cointelegraph Markets Pro and TradingView showed BTC/USD returning to the middle of a narrow range in which it has now spent four days.”Very simple, Bitcoin is still stuck in a narrow range, in which the $42.8K level couldn’t break,” Cointelegraph contributor Michaël van de Poppe summarized to Twitter followers. “Overall, we’re facing support right now, which has to hold to avoid any market breakdowns.”Even with the current push to $43,100, the mood among traders remains cautious even with bullish on-chain indicators persisting and open interest sparking hopes of an upside “short squeeze.”The Crypto Fear & Greed Index, fresh from multi-month lows of just 10/100, remained firmly in “extreme fear” territory after seeing a lift from the overnight price rebound.Crypto Fear & Greed Index. Source: Alternative.meCommenting on derivatives order book action on Jan.10, Decentrader co-founder, filbfilb, said that it was too early to reduce caution.”Big bid fills on Binance, FTX and Bitfinex and a wicky daily candle. So maybe some relief for a bit, but I’m a bear until things materially change,” he told subscribers of his Telegram trading channel.Real pain “yet to come” on altcoinsEqually precarious, fellow trader Pentoshi argued that altcoins were apt to form of bull trap by ticking higher before resuming their own downtrend.Related: ‘Most bullish macro backdrop in 75 years’ — 5 things to watch in Bitcoin this weekLike filbfilb and others, Pentoshi has maintained a cool perspective on Bitcoin, and has even adopted a bearish view extending through 2022 thanks to the macro climate.”A lot of these alts look like they have a little bounce incoming to suck people in before a nasty leg down. Many retesting areas they already bounced off after forming parabolic rises but have huge areas below where supports were never built,” he warned Twitter followers Tuesday. “The real pain is yet to come.”Pentoshi highlighted Solana (SOL), which he said he would be interested in buying only at vastly reduced levels between $50 and $80.SOL/USD traded at $140 at the time of writing, while largest altcoin Ethereum (ETH) reclaimed $3,200 as Bitcoin rose.ETH/USD 1-hour candle chart (Bitstamp). Source: TradingView