Bitcoin gains after $46K drop as 'bottoming out' continues into 2022
Bitcoin (BTC) recovered from fresh lows on Dec. 30 as markets remained undecided on their end-of-year trajectory.
$46,000 may not mark floor
Data from Cointelegraph Markets Pro and TradingView showed BTC/USD bouncing to $47,731 on Bitstamp, reversing almost all of the previous day's losses.
Prior to the Wall St. open, the pair was still above the $47,000 mark, as traders nonetheless warned that choppy BTC price action was not yet over.
"Pretty boring markets lately. Just a process of bottoming out for Bitcoin," Cointelegraph contributor Michaël van de Poppe summarized.
"We're retesting $46K as support, bounced, but we might need to take the liquidity beneath the lows before we're going to make some upwards runs again."
That liquidity lay between $44,000 and $45,000 on the day, with Bitcoin having firmly reestablished its range bounded by resistance at $53,000 and above earlier in the week.
Against a low-liquidity holiday backdrop, the potential for sharp moves up or down remained.
"Alongside an elevated possibility of a leverage squeeze, we also have a general decline in trading volume," on-chain analytics firm Glassnode noted in the latest edition of its weekly newsletter, The Week Onchain.
"Quieter trading activity is typical towards years end, however on a 7-day average basis, futures market volumes have seen a YTD decline of 16%. Thinner volume, and rising open interest (in a concentrated exchange) is a combination that can be favourable to at least a localised leverage squeeze over the coming weeks."
That squeeze, veteran trader Peter Brandt argued this week, is yet to happen.
Not all quiet among traders
As Cointelegraph reported, it was macro markets were making the headlines after Christmas with fresh, if dubious, all-time highs.
At the same time, institutional interest in Bitcoin appears comparatively low, characterized by the underwhelming performance of the U.S.'s first Bitcoin futures exchange-traded fund (ETF).
"Total open interest in futures has almost doubled this year, rising by $9.57B (97%) to a total of $18.87B. This week alone has seen an increase of some $2.5B in open interest, primarily led by traders on Binance," Glassnode nonetheless observed.
Binance's BTC balance increased throughout December, this potentially being down to migrating Chinese users from Huobi Global.Source