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


Crypto-focused stocks also bounced higher, led by bitcoin miners Riot Platforms and Hut 8.

The bounce was broad-based, with nearly all cryptocurrencies of the Coindesk Market Index up in the past 24 hours.

Funding rates for some altcoins and memecoins turned deeply negative, potentially leading to a swift move higher in a short squeeze, QCP Capital noted.

Crypto markets climbed higher Monday with bitcoin (BTC) nearing $67,000 as fears about a deeper correction allayed.

Bitcoin, which underwent its quadrennial halving event during the weekend cutting the issuance of new supply in half, climbed over 3% over the past 24 hours, recently changing hands at $66,500. Ether (ETH) held steady near $3,200, but lagging with its 1.5% advance during the same period.

Crypto's strong showing was broad-based, with 163 out of 173 cryptos in the CoinDesk Market Index (CMI) posting positive daily returns. The broad-based CoinDesk 20 Index (CDI) gained over 3% during the day, led by layer-1 blockchain Near Protocol's native token (NEAR) up 15%.

The bounce extended to digital asset-focused stocks, with shares of crypto exchange Coinbase (COIN) and MicroStrategy (MSTR) rallying 7% and 12%.

Publicly listed miners Riot Platforms (RIOT) and Hut 8 (HUT) surged 15%-20%, while Marathon Digital (MARA) advanced 6% during the day, after transaction frenzy caused a spike in fees – an increasingly important revenue source for miners – gave hopes for better bottom lines for the companies.

Markus Thielen, founder of 10x Research, said Thursday in an interview with CoinDesk TV that bitcoin's halving "is not a bullish event" and warned of market weakness for the next few months, with potentially a deeper correction in the cards. The key reason would be miners offloading their BTC inventory worth $5 billion to keep their operations steady after having their revenue cut, he explained.

On the longer outlook, though, the past three halvings were followed by an exponential move higher for bitcoin's price about 50-100 days after the event, crypto hedge fund QCP Capital pointed out in a Monday market update. "If this pattern is repeated this time, BTC bulls still have a few weeks to build a larger long position," the report said.