Bitcoin Sitting On The EdgeIt’s been a very different start to the year for Bitcoin traders when compared with twelve months ago. There has been no explosive rally heading into 2022 and even the briefest of internet searches will tell you that sentiment is no where near the realms of the ecstatic bullishness we saw at the start of 2021. The market leading crypto coin is now down around 40% from last year’s all-time highs. A combination of structural changes in the market as well as expectations that the Fed will begin aggressively tightening, are combining to weigh on sentiment here. However, it would be foolish to rule out BTC just yet and, given the volatility which makes it famous, we know just how quickly things can turn around.Open Interest SoaringIt is particularly interesting to note that while BTC remains in the doldrums for now, open interest (the amount of open positions held in bitcoin futures across exchanges and brokers) is at all time highs. Given that the market has been in steady decline, the surge in open interest likely reflects growing downside bets. However, given that price has essentially stabilised over the last week around the 4151 level, and looking at the long tails on the last two daily candles, conditions are ripening for a short squeeze according to on-chain analytics firm Glassnode Research.Risks Of A Short Squeeze GrowingGiven the high level of short positions in play, in line with the market’s extremely hawkish Fed expectations, the risks are clear. If we see any data that doesn’t support the narrative of early Fed rate hikes, or if we hear any reduced hawkishness from the Fed, this will no doubt translate into long covering in USD and vice versa, short covering in bitcoin. Friday’s jobs report was already a question mark with the headline NFP number missing the mark. If tomorrow’s CPI data, for example, was weaker than expected, this might well prove the catalyst for a short squeeze.HODLers Holding On Looking ahead, one further interesting point to note from the latest Glassnode Research report is that long term holders of Bitcoin (or HODLers) are still accumulating BTC here. This dynamic is typically present during bearish periods of price action as HODLERS hold and indeed, even add to, their positions. When HODLers begin distributing coins, however, this is synonymous with price rallies. Looking at the latest data shows that we are currently well into an extended period of HODLER accumulation, suggesting that a drawdown in positions (and a price rally) is likely not too farTechnical ViewsBTCFor now, BTC is sitting on support at the 41510 level, which marks the major long-term trend line from 2020 lows.. While within the large falling wedge pattern which has framed the decline from all-time highs, and with both MACD and RSI bearish, the focus is on further downside. The next bear targets to note are the 37030 level and 30640 level. Also of note is the 33055 level which marks the completion of the symmetry move with the last major decline ( April 2021). To the topside, bulls need to see a break above the 45405 level to shift momentum.