Predicting a “short squeeze” for the New Year if Santa Claus doesn’t bring gifts to the crypto market
Bitcoin was range-traded after hitting a ten-day high on December 22nd, amid new warnings of “complacency” in the market.
BTC / USD 1 hour candlestick chart | Source: TradingView
“Short press” forecast
Data from TradingView shows that after BTC consolidated near the $ 50,000 mark, the bulls withstood a significant selling wall around an important psychological level, with analysts calling for a return of $ 50,500 to move into an upward trend in a short space of time to get.
“Today everything will unfold and break out a higher low for BTC. Please carry with us into the $ 53,000 zone where everyone can win and get the glory, ”wrote famous trader Pentoshi. tweet.
While the “Santa rally” has so far escaped both the crypto and traditional markets, some are betting on changes around the New Year’s season.
For the trading company QCP Capital, the key lies in the low liquidity during the upcoming holidays, which can lead to a “short squeeze” in a lukewarm market environment.
“We think the market is complacent as the trading range is within that 45,500-49,500 channel. Now would be a good time to buy some swing levels (away from the strike price), ”QCP Capital show on December 22nd
“… We still believe that there will be a bottleneck (probably at its peak) as liquidity dwindles over the holidays and into 2022. When this happens it is a must to swing levels too own. It will be very beneficial. ”
Data from Coinglass shows that funding rates on the exchanges have turned positive but are neutral at press time, suggesting a lack of speculative activity.
BTC funding rate chart | Source: Coinglass
Crypto stocks can’t compete with Bitcoin, ETH
Despite the volatility in prices, recent data shows that buying and holding has produced far higher returns this year, despite all the growth in the Bitcoin industry.
If you look at the stock performance of the companies with the largest Bitcoin allocations on their balance sheets, it’s immediately clear that holding BTC brings better returns than these stocks – at least this year.
“It’s hard for crypto stocks to outperform crypto itself,” said Zhu Su., CEO of Three Arrows Capital comment along with benchmarking data.
Both Bitcoin and Ether have far outperformed stocks of crypto-related companies like MicroStrategy (MSTR) and Coinbase (COIN), although both hit the mark in 2021.
Crypto stocks vs. BTC vs. ETH | Source: Zhu Su / Twitter
The numbers illustrate the difference between the traditional market and the cryptocurrency market, where the crypto market enjoys freedom of expression that has long since ceased to exist in the stock, commodity and asset markets.
“Markets look to the future. Cryptocurrencies are the only free market in the world, ”says analyst Pentoshi notice Earlier this month.
For private investors in particular, a price averaging (DCA) strategy with an allocation in BTC can minimize short-term volatility and thus look more attractive.
Miners are fighting against BTC
Data from the largest publicly traded mining consortia support this trend.
Compared to the start time and even the share price at the time of the initial public offering, most of them are well below BTC.
Only BitFarms (BITF) is currently making a profit in December.
Miner stocks vs. BTC comparison chart | Source: Dylan LeClair / Twitter
However, involvement in the crypto mining space in the United States is increasing and listing transactions continue to take place. Texas is aspiring to become a mining mecca where electricity demands could rise multiple times over the next year.
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