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Despite the carnage, many traders remain super bullish on Bitcoin

Bitcoin (BTC) remains well below its highs and there seems to be little reason for optimism. Not so for many traders who are optimistic.

Cumberland, a Chicago-based market maker that buys and sells with institutions and other firms engaged in large trades, recently surveyed its clients and found optimism abounding.

While the median respondent doesn't think the pain is completely over -- bitcoin is expected to fall to $16,000 in 2022 from around $23,500 currently -- a sharp rebound is expected: a jump to as high as $32,000 sometime this year.

ddf1bcfc1856c1308665774b4dd04283According to the report released this week, "Even after a severe sell-off, the average respondent remains highly firmly bullish." "Even in a bear market, direction is not surprising. After all, most of us are in crypto because we believe in Bitcoin. If we didn't have a bullish streak, we might still be trading [forex]."

However, the magnitude of the expected rebound surprised the Cumberland division of Chicago Board of Trade legend Don Wilson's DRW, given that respondents only saw a 4% gain in the Nasdaq and that stock and cryptocurrency prices were closely correlated.

Talk of a long cryptocurrency winter has unnerved many investors, so bullish sentiment among professionals is particularly risky. Like traditional markets like stocks, though, the path of cryptocurrencies may indeed depend on whatever the Fed does with U.S. interest rates. Indeed, Cumberland's clients share this view. "Surprisingly, the most common reaction to both positive and negative catalysts was Fed action," the report said.

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