Analysis and Trading Strategies Post Bitcoin’s Fourth Halving: QCP’s Insights and Recommendations
The completion of Bitcoin’s fourth halving has left traders and investors speculating about the short-term market dynamics. While the spot price of Bitcoin saw a slight increase over the weekend, not much significant movement was observed immediately after the halving event, according to a recent note by QCP on Telegram.
Historically, the three previous halvings resulted in a substantial surge in the spot price of Bitcoin, but this exponential growth took place approximately 50 to 100 days after the halving. If this pattern repeats itself, Bitcoin bulls may have a few more weeks to accumulate larger long positions.
In the short term, analysts at QCP anticipate a potential short squeeze led by Altcoins and Memecoins. These alternative cryptocurrencies have been experiencing persistent negative funding rates, with some reaching as low as -100%. A short squeeze occurs when short sellers are forced to cover their positions, driving the price of the asset higher due to the sudden surge in demand.
Furthermore, QCP noted that Ethereum risk reversals have been normalizing to above -4%. This improvement in speculative sentiment could trigger short covering and a resurgence of leveraged long positions in ETH.
In light of these market dynamics, QCP suggests two trade ideas. Firstly, for those with a structurally bullish view on BTC, QCP recommends exploring Extended Range Knockouts (ERKOs) as they offer an appealing risk-reward profile. Two ERKO options put forward by QCP are the ERKO 27 Dec 2024 75/150k and the ERKO 28 Mar 2025 150/250k.
Additionally, QCP suggests building BTC long positions in the coming weeks, capitalizing on a significant discount around the 55k level. This strategy aims to take advantage of the anticipated post-halving exponential rally.
As reported, digital asset investment products have faced another week of outflows, marking the second consecutive week of declining investor interest. Bitcoin investment products witnessed outflows of $192 million, while short-Bitcoin strategies experienced outflows of $0.3 million.
Overall, the completion of Bitcoin’s fourth halving has set the stage for an interesting period in the cryptocurrency market, with traders and investors closely monitoring the short-term market dynamics and potential opportunities for profit.
