Bitcoin (BTC<\/a>) broke through $42,000 on Jan. 11 as expectations of a fresh \u201cshort squeeze\u201d mounted.<\/p>\n Data from Cointelegraph Markets Pro<\/a> and TradingView<\/a>\u00a0followed BTC\/USD as it recovered from Monday\u2019s dip to $39,600 \u2014 its first breach<\/a> of the $40,000 mark since September.<\/p>\n While short-term bullish prognoses were conspicuously absent on the day, attention focused on the potential for derivatives markets to spark another \u201cshort squeeze.\u201d<\/p>\n With open interest near all-time highs despite the downturn and sentiment clearly favoring further downside, a surprise uptick could have the impact of \u201csqueezing\u201d short positions and providing some relief for bulls.<\/p>\n As on-chain analytics firm Glassnode noted<\/a> in the latest edition of its weekly newsletter, \u201cThe Week On-Chain,\u201d such an event is overdue. Longs have suffered almost constantly<\/a> since November\u2019s $69,000 all-time highs, and \u201csqueezes\u201d further occur when the market least expects a certain outcome.<\/p>\n \u201cShort traders, who have not been punished for taking on increasing risk, may find themselves candidates for a near-term squeeze,\u201d researchers forecast.<\/p>\n Such an event could well be amplified thanks to \u201ctepid\u201d demand for spot BTC and futures open interest leverage, which is approaching 2% of the Bitcoin market capitalization, Glassnode continued.<\/p>\n \u201cAlongside very oversold indicators in on-chain spending activity, this suggests a short squeeze is actually a reasonably likely near-term resolution for the market,\u201d the newsletter concluded. <\/p>\n Analysts, meanwhile, considered alternatives to the high open interest being removed via another leg down toward $30,000.<\/p>\n Related: \u2018Most bullish macro backdrop in 75 years\u2019 \u2014 5 things to watch in Bitcoin this week<\/a><\/em><\/strong><\/p>\n Despite no \u201cwipeout\u201d of open interest yet occurring, a surprise upside move could yet be the event that resets market composition, popular Twitter account Credible Crypto argued on the day.<\/p>\n \u201cWhat if the major OI wipeout everyone is looking for ends up happening because of a squeeze to the upside rather than a move further down?\u201d he quizzed<\/a> in response to data from fellow analyst William Clemente. <\/p>\n \u201cHappened in August \u201821 as we moved off the 30K bottom. Think we probs see that play out again. Bears bout to be wiped clean.\u201d<\/p><\/blockquote>\n As Cointelegraph reported, $40,000 has been forming a significant price zone<\/a> from multiple points over the past 12 months.<\/p>\n<\/div>\n![](\"https:\/\/s3.cointelegraph.com\/uploads\/2022-01\/d88c87f2-bc10-4265-92ab-b55887fd3b2e.png\")
Short-term squeeze \u201creasonably likely\u201d<\/h2>\n
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For every short, there\u2019s a long<\/h2>\n
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