Bitcoin holds off on Santa rally as fund forecasts a new year ‘short squeeze’

After hitting ten-day highs Dec. 22, Bitcoin (BTC), remained rangebound amid new warnings about market “complacency”.

BTC/USD 1-hour candle charts (Bitstamp). Source: TradingView

What about a new year’s squeeze?

Data from TradingView and Cointelegraph Markets Pro followed BTC/USD’s consolidation after it came within $400 of $50,000.

Bulls faced a strong sell wall at the psychologically significant level. Analysts called for $50,500 to hit, and then hold to turn positive in a short timeframe.

Pentoshi, a popular trader, tweeted “Today the Seas will be parted making room for a shot to a higher low BTC,” in a typical social media post.

“I beg for bears, please. Come to the Ark. Safety is yours. Come with us to 53k, where everyone can win and share in glory.

Although the “Santa rally,” has not yet been seen in crypto or traditional markets, many were optimistic about a possible turnaround in the new year.

QCP Capital is a trading firm. The key lies in the holiday low liquidity, which could cause a squeeze in a nonchalant market.

“We think the market is becoming complacent as spot prices compress in this channel between 45,500 and 49,500. It advised Wednesday that now is a good time to purchase some wings (far strikes).

“… We believe there will be a squeeze, most likely to the topside, as liquidity thins into the holidays and into 2022. Owning wings could be very lucrative if this happens.

Coinglass data showed that funding rates for exchanges were neutral but positive across exchanges at the time, suggesting a lack in speculative activity.

Chart of BTC funding rates. Source: Coinglass

Dollar loses new gains

The Wall Street open was muted, while macro cues remained muted, and a 4.3% increase in Tesla (TSLA stock) failed to affect Bitcoin performance.

Related: Did you miss out on the best crypto stocks for 2021? Data shows that it cost just $80 to buy Bitcoin and Ethereum.

After the opening bell, the S&P 500 was slightly higher. Meanwhile, the Coronavirus panic that had plagued the past week seemed to have subsided.

Additional relief was provided by a falling U.S. Dollar, with the U.S. currency index (DXY), heading towards 96 support throughout today.

U.S. dollar currency indicator (DXY), 1-hour candle chart. Source: TradingView

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Eileen Wilson

Eileen Wilson –Technology and Energy My Name is Eileen Wilson with more than 5 years of experience in the Stock market industry, I am energetic about Technology news, started my career as an author then, later climbing my way up towards success into senior positions. I can consider myself as the backbone behind the success and growth of topmagazinewire.com with a dream to expand the reach out of the industry on a global scale. I am also a contributor and an editor of the Technology and Energy category. I experienced a critical analysis of companies and extracted the most noteworthy information for our vibrant investor network.

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