The cryptocurrency market was rattled by a meteoric rise in Bitcoin, briefly touching $94,000 on December 9, sparking investor excitement. However, analysts warn of a potential market trap orchestrated to liquidate short positions and lure buyers just before the crucial FOMC meeting. Dive deeper into this intricate market dynamic.
The rapid rise of Bitcoin from $89,000 to $94,000 triggered a cascade of liquidations, with over $130 million in short positions wiped out in less than an hour. This phenomenon, known as a “short squeeze,” artificially propelled the price upward. But the trap didn’t close solely on sellers.
On-chain data shows that a significant portion of new long positions were opened at the peak of the move, a practice dubbed “top longing.” These buyers, caught up in the fear of missing out (FOMO), are now sitting on unrealized losses. Trapped by a market that quickly turned against them.
Several technical indicators reinforce the trap thesis. First, the price was violently rejected from a bearish “order block” on the 6-hour chart, a zone where institutional sellers placed massive orders.
Second, the CVD (Cumulative Volume Delta), which measures order flow, indicates hidden distribution. Despite the price increase, selling volume exceeded buying volume, suggesting that insiders were selling while the general public was buying. Finally, Bitcoin quickly re-entered its previous price range below $93,500, transforming what looked like a bullish breakout into a probable “fake breakout.”
The timing of this maneuver, just before the FOMC decision on interest rates, is particularly suspect. The market already expects a rate cut, news that is therefore already “priced in.”
The strategy of market manipulators would be to create artificial euphoria using this expectation. Pushing traders to buy in anticipation of the “good news.” Once buyers are trapped, insiders could then sell massively at the time of the announcement, taking advantage of potentially hawkish comments from the Federal Reserve to crash the market and liquidate long positions taken at the top.
While the rise to $94,000 may have seemed like the start of a new rally toward $100,000. Technical evidence suggests patience is needed before drawing a conclusion.
Bitcoin now has two key levels: $94,200 and $86,000. The break of one of these levels will determine Bitcoin’s direction in the coming days.
The combination of massive short liquidations, a long trap, rejection at a key order block, and hidden distribution via CVD paints a bearish picture in the short term. As long as Bitcoin fails to sustain itself above $93,500, a return to support levels at $87,000, or even $82,000, remains the most likely scenario. Especially since the main liquidity is now to the south, down to $86,000.
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Charles Ledoux is a Bitcoin and blockchain technology specialist. A graduate of the Crypto Academy, he has been a Bitcoin miner for over a year. He has written numerous masterclasses to educate newcomers to the industry and has authored over 2,000 articles on cryptocurrency. Now, he aims to share his passion for crypto through his articles for InvestX.
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