Bitcoin price rally or short squeeze: $93.5 million in BTC shorts closed on Bitfinex


  • Bitcoin shorts worth $93.5 million were closed in December 2022, could this be a sign a BTC price rally is imminent?
  • Experts argue late shorts getting liquidated implies a short squeeze, overall sentiment and outlook need to change for bullish breakout. 
  • Bitcoin price predictions for 2023 range from $30,000 to $250,000 as analysts hunt for peak opportunity for bulls.

Bitcoin experts are debating whether the recent moves in the largest asset by market capitalization are indicative of a rally or a short squeeze. A short squeeze occurs when an asset that has been in an extended downtrend sees its price suddenly rise rapidly and short sellers decide to cut their losses and exit their positions. The increase in BTC price during a short squeeze can last from weeks to a few months, depending on other factors influencing the asset. 

Analysts remain bullish on a recovery in BTC price in 2023, bulls continue their hunt for a breakout in Bitcoin. 

Also read: Bitcoin and Ethereum to battle rising liquidity pressures in 2023, here’s what to expect

Bitcoin shorts worth $93.5 million were liquidated in December, BTC price rally incoming?

Bitcoin shorts worth $93.5 million were closed in December 2022 on cryptocurrency exchange platform, Bitfinex. A massive volume of closed shorts imply traders were bearish on the asset and decided to cut losses once BTC price climbed higher. Interestingly, this also signals uncertainty in the direction of Bitcoin price. 

Bitcoin shorts liquidated in December 2022

Bitcoin shorts liquidated in December 2022 on Bitfinex

In the second half of 2022, BTC went through several phases of low volatility and lateral price movement. Volatility eventually returned and experts predict the same for Q1 2023. Bitcoin maximalists, investors and traders who believe BTC is the most superior cryptocurrency available and the one that is here to stay for the long haul argue that a price rally is imminent. 

On the contrary, technical experts in The Trading Capital, an online trading community, believe that the pump in BTC is just a short squeeze triggered by the liquidation of late shorts. But the bullishness needs confirmation through a spike in trade volume and a positive trend in macroeconomic outlook. Analysts argue that the overall sentiment among BTC traders is bearish and recommend waiting for a confirmation before opening a long position in the asset. 

BTC total liquidations

BTC total liquidations

Based on the above chart from Coinglass, $9.12 million in shorts and $2.02 million in long positions were liquidated as of Jan 2. 

Bitcoin price predictions for 2023: $30,000 to $250,000, bullish outlook on BTC

Bitcoin price predictions range from $30,000 to $250,000 among experts and analysts. Tim Draper, an American venture capital investor, maintained an optimistic stance on BTC and predicted a run up to $250,000 by the end of 2023. Draper’s target implies a 1,400% rally in the largest cryptocurrency. 

Carol Alexander, Professor of Finance and Chair of Risk Management at the ISMA Centre argues Bitcoin is primed for gains and argues that the FTX contagion could catalyze a “managed bull market.” Alexander believes BTC could hit $50,000 in 2023.

Alistair Milne, a British entrepreneur and investor set a $45,000 target for the largest cryptocurrency by market capitalization. Milne believes BTC price should reach $150,000 to $300,000 by the end of 2024, arguing that “this is no time to be bearish and is likely a peak opportunity for the bulls.”

Swedish researcher and founder of Simp DAO Eric Wall believes BTC could pump above $30,000 at some point in 2023, without an exact timeline. Wall argues that $15,400 was the bottom for the virtual asset. 


Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Recommended content


Recommended Content

Editors’ Picks

US presidential election outcome could shape the future of crypto

US presidential election outcome could shape the future of crypto

US citizens will go to the polls to elect a new president on November 5, and their choice could be key for the future of the crypto industry and thus the price outlook for Bitcoin (BTC).

More Cryptocurrencies News
Bitcoin Price Forecast: BTC recovers as Donald Trump takes lead on polls

Bitcoin Price Forecast: BTC recovers as Donald Trump takes lead on polls

Bitcoin (BTC) slightly recovered to around $68,800 on Tuesday, following a shift in the United States presidential race that saw former President Donald Trump regain the lead, after US spot Bitcoin ETFs experienced an outflow of over $540 million on Monday.

More Bitcoin News
Crypto markets brace for volatility in tight race between Trump and Harris

Crypto markets brace for volatility in tight race between Trump and Harris

The US presidential election is one of the most significant events in the world. Due to the influence of the country’s political decisions, policies, and economic approaches, it can significantly impact crypto and global markets. 

More Cryptocurrencies News
Trump-inspired memecoin MAGA shows bullish on-chain metrics ahead of US elections

Trump-inspired memecoin MAGA shows bullish on-chain metrics ahead of US elections

MAGA (TRUMP) trades slightly down to around $3.4 on Tuesday after rallying more than 20% since Sunday. The former President Donald Trump-based memecoin is poised for further gains as daily active addresses and network growth metrics rise, signaling increased network usage and adoption

More Cryptocurrencies News
Bitcoin: New all-time high at $78,900 looks feasible

Bitcoin: New all-time high at $78,900 looks feasible

Bitcoin price declines over 2% this week, but the bounce from a key technical level on the weekly chart signals chances of hitting a new all-time high in the short term. US spot Bitcoin ETFs posted $596 million in inflows until Thursday despite the increased profit-taking activity.

Read full analysis
Best Forex Brokers with Low Spreads

Best Forex Brokers with Low Spreads

VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.

Read More

BTC

ETH

XRP