Altcoins
Altcoins and Memecoins Ready for Short-Term Halving After Fourth BTC Halving: QCP
Last updated: April 23, 2024 03:56 EDT | 2 minutes of reading
The completion of the fourth Bitcoin halving has left traders and investors speculating on near-term market dynamics.
While the spot price of Bitcoin saw a slight increase over the weekend, little significant movement was seen immediately after the halving event, QCP wrote in a recent note on Telegram.
Historically, the previous three halvings resulted in a substantial rise in the Bitcoin spot price, but this exponential growth occurred approximately 50 to 100 days after the halving.
If this pattern repeats, Bitcoin bulls could have a few more weeks to accumulate larger long positions.
QCP expects short squeeze after Bitcoin halving
In the short term, QCP analysts anticipate a potential short squeeze led by Altcoins and Memecoins.
These alternative cryptocurrencies are experiencing persistent negative funding rates, with some reaching -100%.
A short squeeze occurs when short sellers are forced to cover their positions, causing the price of the asset to rise due to the sudden increase in demand.
“What we might see in the near term is a short-term squeeze led by Altcoins and Memecoins which have seen persistent negative funding.”
Additionally, QCP noted that Ethereum risk reversals have normalized above -4%.
This improvement in speculative sentiment could trigger short covering and a resurgence of leveraged long positions in ETH.
QCP: After the fourth BTC halving, we may see a short-term squeeze led by Altcoins and Memecoins which have seen persistent negative funding, some as high as -100%. With the ETH risk reversal normalizing above -4%, an improvement in speculative sentiment could see…
-Wu Blockchain (@WuBlockchain) April 23, 2024
QCP Trading Ideas
In light of these market dynamics, QCP suggests two business ideas.
First, for those with a structurally bullish view of BTC, QCP has noticed significant and consistent buying of BTC calls expiring at the end of the year and beyond.
They recommend exploring Extended Range Knockouts (ERKO) as they offer an attractive risk-reward profile.
Two ERKO options offered by QCP are the ERKO December 27, 2024 75/150k and the ERKO March 28, 2025 150/250k.
The former offers a maximum payout of 10.52 times the investment at a price of $7,130 per BTC, while the latter features an even higher maximum payout of 40 times the investment at a price of $2,500 per BTC.
Additionally, QCP suggests building long BTC positions in the coming weeks, capitalizing on a significant discount around the 55,000 level.
This strategy aims to take advantage of the expected exponential rally after the halving.
To implement this approach, QCP recommends considering a BTC accumulator with an expiration date of 6SEP24, providing a 20-week time frame.
The strike price is set at USD 55,000, reflecting a discount of approximately 19.70% to the current spot price, while the upper barrier stands at USD 80,000, offering an upside potential of 10,000 USD. 61%.
As reported, digital asset investment products faced another week of capital outflows, marking the second consecutive week of declining investor interest.
The outflows amounted to a total of $206 millionwhile trading volumes on exchange traded products (ETPs) saw a slight decline.
Bitcoin investment products saw outflows of $192 million.
However, few investors saw this as a short selling opportunity, with Bitcoin short selling strategies seeing outflows of $0.3 million.