Bitcoin Eyes $67K After Halving as Altcoins Primed for Short Squeeze, Hedge Fund Says

Bitcoin and other cryptocurrencies rose in value on Monday, with bitcoin approaching $67,000. Concerns about a more significant decline eased.

Digital asset-centric stocks saw a rebound, as evidenced by a 7% surge in Coinbase (COIN) shares and a 12% gain for MicroStrategy (MSTR).

These publicly traded mining companies – Riot Platforms (RIOT), Hut 8 (HUT), and Marathon Digital (MARA) – experienced significant gains, with increases of approximately 15%-20% for the first two and 6% for the last one. The surge came following a day filled with intense transaction activity that led to heightened fees. This trend offers miner companies optimism regarding improved financial results due to the growing significance of fee revenue.

Read more: Bitcoin Halving Is Poised to Unleash Darwinism on Miners

Markus Thielen, the founder of 10x Research, expressed his perspective in an interview with CoinDesk TV on Thursday. He stated that Bitcoin’s halving is not a bullish sign and anticipated market instability for the upcoming months, possibly leading to a more significant correction. Miners, according to him, would be selling their $5 billion worth of Bitcoin to sustain their operations following a revenue decrease.

Looking ahead, it’s worth noting that historically, bitcoin’s price has surged significantly around 50-100 days after each of the last three price halvings, according to crypto hedge fund QCP Capital in their latest market update released on Monday. Therefore, if this trend continues, Bitcoin investors have a few weeks left to increase their long positions.

The fund pointed out that funding rates, which represent the fees derivatives traders must pay to maintain their positions, have significantly decreased from extremely high prices. In fact, they have dipped into negative territory for certain smaller cryptocurrencies. If market confidence rebounds, these cryptocurrencies could experience a sharp increase in value as a result.

In the near future, altcoins and memecoins with significant negative funding, some reaching as low as -100% annually, may trigger a short squeeze. As optimism among speculators grows, there could be a rush to cover short positions and resume buying on leverage.