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, advanced 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% increase 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.

The fund also noted that funding rates – the cost leveraged derivatives traders need to pay for keeping their positions open – cooled off from very hot levels, and even turned into deep negative territory for some smaller cryptocurrencies, making them ripe for a swift move higher if risk-appetite returns.

Funding rates have cooled substantially compared to last month (CoinGlass)

"What 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% [annualized]," QCP Capital said. "Improving speculative sentiment could see short covering and a resumption of leveraged longs."

Market Wrap Bitcoin Stocks QCP Capital short squeeze

Krisztian Sandor

Krisztian Sandor recently graduated from NYU's business and economic reporter program as a Fulbright fellow and worked with Reuters and Forbes previously. Originally from Budapest, Hungary, he is now based in New York. He holds BTC and ETH.