Bitcoin is on the rise, eyeing $67K post-halving, with altcoins poised for a short squeeze, a hedge fund suggests.
The bounce was widespread, with almost all cryptocurrencies in the CoinDesk Market Index seeing gains in the past 24 hours. According to QCP Capital, funding rates for specific altcoins and memecoins have plunged significantly, possibly setting the stage for a sudden surge in a short squeeze.
Crypto markets surged on Monday, with bitcoin approaching $67,000 as concerns about a deeper correction eased.
Bitcoin, which underwent its quadrennial halving event over the weekend, cutting the issuance of new supply in half, rose over 3% in the past 24 hours, recently trading at $66,500. Ether remained steady near $3,200, with a 1.5% increase during the same period.
Bitcoin Reach $67,000 Crypto market’s strong performance was broad-based, with 163 out of 173 cryptos in the CoinDesk Market Index (CMI) recording positive daily returns. The CoinDesk 20 Index (CDI) rose over 3% during the day, led by layer-1 blockchain Near Protocol’s native token, NEAR, up 15%.
The rally extended to stocks of digital asset-focused companies, with shares of crypto exchange Coinbase (COIN) and MicroStrategy (MSTR) surging 7% and 12%, respectively.
Publicly listed miners Riot Platforms (RIOT) and Hut 8 (HUT) saw gains of 15%-20%, while Marathon Digital (MARA) rose 6% during the day, following a transaction frenzy that caused a spike in fees – an increasingly important revenue source for miners – raising hopes for improved bottom lines.
Bitcoin Reach $67,000
Markus Thielen, the founder of 10x Research, advised during an interview with CoinDesk TV that Bitcoin’s halving “does not necessarily indicate a bullish trend” and he cautioned about potential market weakness in the upcoming months. potentially leading to a deeper correction. He explained that miners are selling their BTC inventory worth $5 billion to maintain their operations after their revenue was halved.
However, looking further ahead, the past three halvings were followed by a significant increase in bitcoin’s price about 50-100 days after the event, noted crypto hedge fund QCP Capital in a Monday market update. The report noted that if this trend recurs, Bitcoin bulls have a few weeks to increase their long positions.”
The fund also highlighted that funding rates – the cost leveraged derivatives traders pay to maintain their positions – have cooled off from very high levels and even turned deeply negative for some smaller cryptocurrencies, indicating they could see a sharp rise if risk-appetite returns.
“In the short term, we could see a short squeeze led by altcoins and memecoins that have experienced persistent negative funding, with some as low as -100% [annualized],” QCP Capital stated. “An improvement in speculative sentiment could lead to short covering and a resumption of leveraged longs.”
