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The conclusion of Bitcoin’s fourth halving has prompted traders and investors to ponder the immediate market conditions.
Although the spot price of Bitcoin experienced a minor uptick over the weekend, there was not much notable movement right after the halving event, as noted by QCP in a recent message on Telegram.
In the past, the three earlier halvings led to a significant rise in Bitcoin’s spot price, but this rapid increase typically occurred around 50 to 100 days following the halving.
If this trend holds true, Bitcoin bulls may have additional weeks to build larger long positions.
QCP Anticipates Short Squeeze Following Bitcoin Halving
In the near term, analysts at QCP foresee a possible short squeeze driven by Altcoins and Memecoins.
These alternative cryptocurrencies have been facing ongoing negative funding rates, with some dipping as low as -100%.
A short squeeze happens when short sellers are compelled to close their positions, resulting in a price increase for the asset due to the sudden rise in demand.
“What we could see in the short-term is a short-squeeze led by Altcoins and Memecoins which have seen persistent negative funding.”
Moreover, QCP highlighted that Ethereum risk reversals have been returning to levels above -4%.
This enhancement in speculative sentiment could lead to short covering and a revival of leveraged long positions in ETH.
QCP: After BTC‘s 4th halving, we could see in the short-term is a short-squeeze led by Altcoins and Memecoins which have seen persistent negative funding, with some as deep as -100%. With ETH risk reversals normalising to above -4%, improving speculative sentiment could see…
— Wu Blockchain (@WuBlockchain) April 23, 2024
QCP Trading Recommendations
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Considering these market conditions, QCP proposes two trading strategies.
Firstly, for those holding a fundamentally bullish perspective on BTC, QCP has observed ongoing substantial purchases of BTC calls set to expire at the end of the year and beyond.
They advise looking into Extended Range Knockouts (ERKOs) as they provide an attractive risk-reward ratio.
Two ERKO options suggested by QCP include the ERKO 27 Dec 2024 75/150k and the ERKO 28 Mar 2025 150/250k.
The former offers a maximum payout of 10.52 times the investment at a price of 7130 USD per BTC, while the latter presents an even greater maximum payout of 40 times the investment at a price of 2500 USD per BTC.
Additionally, QCP recommends establishing BTC long positions in the upcoming weeks, taking advantage of a notable discount around the 55k mark.
This tactic aims to leverage the expected post-halving exponential rally.
To execute this strategy, QCP suggests considering a BTC Accumulator with an expiration date of 6SEP24, allowing for a 20-week period.
The strike price is set at 55,000 USD, indicating a discount of approximately 19.70% from the current spot price, while the upper limit is at 80,000 USD, presenting a potential upside of 10.61%.
As reported, digital asset investment products have encountered another week of outflows, marking the second consecutive week of waning investor interest.
The total outflows reached $206 million, while trading volumes in exchange-traded products (ETPs) saw a slight decline.
Bitcoin investment products experienced outflows of $192 million.
However, few investors perceived this as a chance for short-selling, with short-Bitcoin strategies facing outflows of $0.3 million.
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