Gate News Report, March 10 — 10x Research analyzed that after Circle was pointed out by analysts to potentially experience short covering ahead of its February 20 earnings report, its stock price increased by over 80% in less than three weeks. Although some hedge funds had already begun reducing their positions before the catalyst event (with short positions accounting for 17.8% of circulating shares), they may have incurred approximately $1 billion in unrealized losses during the sharp price surge. 10x Research recommends investors monitor the size of hedge fund short positions across the entire crypto stock sector to identify potential trading opportunities. The analysis indicates that short covering has provided strong upward momentum for crypto-related stocks, allowing them to outperform Bitcoin. While the momentum may not be as explosive as Circle’s previous rally, the risk-reward ratio remains attractive and offers downside protection, making it suitable for the current market environment.
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