Bitcoin is approaching $67,000 after its recent halving, while altcoins are primed for a short squeeze due to deeply negative funding rates, according to hedge fund QCP Capital. The overall crypto market is experiencing a broad-based rally, with the CoinDesk Market Index seeing positive returns for nearly all its constituent cryptocurrencies.
Bitcoin Surges Towards $67k Post-Halving; Altcoins Poised for Short Squeeze, Hedge Fund Predicts
Amidst heightened crypto market activity, Bitcoin (BTC) has embarked on a remarkable ascent, approaching the $67,000 mark. This rise follows the recent halving event, a significant milestone in the cryptocurrency's lifecycle that has historically ignited bullish price movements. As investor sentiment surges, altcoins and memecoins have emerged as potential catalysts for a short squeeze that could further buoy the market.
Over the past 24 hours, Bitcoin has witnessed a surge of over 3%, propelling its value to $66,500. This impressive gain has been accompanied by a steady performance from Ethereum (ETH), which has held its ground near $3,200 with a modest 1.5% increase.
The resurgence has extended beyond Bitcoin and Ethereum, permeating the broader crypto ecosystem. The CoinDesk Market Index (CMI), a comprehensive gauge of cryptocurrency performance, has witnessed an impressive uptick, with 163 out of 173 cryptos registering positive daily returns. The broad-based CoinDesk 20 Index (CDI) has mirrored this momentum, gaining over 3% during the day, with Near Protocol's layer-1 blockchain native token (NEAR) leading the charge with a surge of 15%.
Digital asset-focused companies have also experienced the ripple effects of the positive market sentiment. Coinbase (COIN) and MicroStrategy (MSTR) have witnessed significant rallies, with their shares climbing by 7% and 12%, respectively. Publicly listed miners such as Riot Platforms (RIOT) and Hut 8 (HUT) have outperformed, surging by 15%-20%, while Marathon Digital (MARA) has posted a 6% gain. This upswing is attributed to a surge in transaction fees, which has emerged as a lucrative revenue stream for miners.
While the immediate market outlook remains positive, Markus Thielen, founder of 10x Research, has cautioned against excessive optimism. In a recent interview with CoinDesk TV, Thielen expressed concerns about potential market weakness in the coming months, fueled by miners liquidating their BTC inventory to maintain operational stability. However, he acknowledged the historical trend of exponential price increases for Bitcoin approximately 50-100 days following each halving event.
Crypto hedge fund QCP Capital has reinforced this bullish outlook, highlighting that funding rates, which reflect the cost of maintaining open leveraged derivatives positions, have cooled from elevated levels. Notably, some smaller cryptocurrencies have experienced deeply negative funding rates, setting the stage for a potential short squeeze if risk appetite returns.
QCP Capital anticipates a short-term surge led by altcoins and memecoins that have endured persistent negative funding. As speculative sentiment improves, short sellers may cover their positions, triggering a resumption of leveraged longs and further market momentum.
Overall, the crypto market is exhibiting resilience and optimism, driven by a combination of Bitcoin's halving event, positive investor sentiment, and the potential for a short squeeze. However, it remains prudent to approach the market with caution, mindful of potential headwinds such as miner liquidations. As the market continues to evolve, investors are advised to stay abreast of developments and make informed investment decisions.