Bitcoin Eyes $58K With Downtrodden Crypto Markets Exposed to Short Squeezes, Says Analyst

Bitcoin

(BTC)
was
rising
on
Tuesday
as
the
crypto
market
continued
its
rebound
from
last
week’s
fear-inducing
plunge.

The
largest
crypto’s
price
was
nearing
$58,000
late
in
the
U.S.
trading
session,
up
1.7%
in
the
past
24
hours
and
higher
by
nearly
10%
from
last
Friday’s
low.
Ether

(ETH)
and
solana

(SOL)
each
advanced
1.5%
over
the
past
day.

Toncoin

(TON),
Artificial
Superintelligence
Alliance

(FET)
and
Internet
Computer

(ICP)
were
the
biggest
gainers
among
altcoin
majors,
advancing
5%-8%.
The
broad-market
benchmark
CoinDesk
20
Index
climbed
1.3%
to
1,835,
with
16
out
of
its
20
constituents
advancing
during
the
day.

Chances
are
low
that
crypto
gets
a
mention
during
tonight’s
U.S.
presidential
debate
between
Donald
Trump
and
Kamala
Harris,
but
the
striking
contrast
between
the
two
parties’
approach
on
digital
assets,
and

what
their
leadership
would
mean
for
prices,
nevertheless
lends
importance
to
the
event.

Uncertainty
around
the
election
will
likely
weigh
on
crypto
prices
until
November,
said
Aurelie
Barthere,
principal
research
analyst
at
Nansen,
but
today’s
debate
“could
bring
a
small
breather
[as]
Harris’
lead
in
the
polls
might
erode
somewhat
as
the
tailwinds
of
the
Democratic
National
Convention
fade.”

While
investors
are
still
fearful
of
further
downside,
one
reliable
metric
foreshadows
a
significant
rally
in
the
coming
weeks
and
months,
a

Tuesday
market
report
by
K33
Research
said.

The
30-day
average
funding
rates
for
perpetual
swaps
slid
to
negative
levels,
which
has
only
happened
six
times
since
2018,
according
to
the
report.

“In
the
past,
monthly
funding
rates
hitting
negative
levels
have
coincided
with
a
market
bottom,”
K33
analysts
Vetle
Lunde
and
David
Zimmerman
wrote.

Based
on
the
previous
occasions
when
the
metric
flipped
negative,
the
average
return
in
the
following
90-day
period
was
79%
with
the
median
90-day
return
being
55%,
the
report
said.

Open
interest
for
derivatives,
meanwhile,
gradually
climbed
to
the
highest
level
since
late
July
as
shorts
piled
in.
This,
combined
with
persistent
negative
funding
rates,
leaves
the
market
for
potential
short
squeezes,
according
to
the
report.

“Similar
funding
rate
environments
offer
a
very
compelling
case
for
aggressive
exposure
in
BTC
in
the
months
ahead,”
the
authors
said.