Bitcoin Squeezes to $35.5K as 'Mini Altcoin Season' Lifts Crypto Market Cap to $1.3 Trillion

• Bitcoin spiked Wednesday afternoon nearly 3% to $35,500 in a short squeeze, while solana led altcoin gains.
• Widening crypto rally lifted total cryptocurrency market cap to $1.3 trillion, its highest since May 2022.
• K33 analyst recommends "aggressive accumulation of bitcoin" for November.

Bitcoin [BTC] jumped to $35,500 Tuesday as the widening altcoin rally and risk-on sentiment in traditional markets lifted the total cryptocurrency market's value to a 16-month high.

A quiet and modestly lower session was upended mid-afternoon as bitcoin quickly spiked nearly 3% from $34,600, with some suggesting a short squeeze in the derivatives markets as the reason. At press time, bitcoin was trading at $35,600, up nearly 2% over the past 24 hours.

$BTC
Started with spot taker bid ~ mentioned earlier that is required for higher

Perp premium spiking due to shorts getting blown out & probably longs going to chase here https://t.co/vO5UXp8qnS pic.twitter.com/al5ZJEGUfZ

— Skew Δ (@52kskew) November 7, 2023

Solana [SOL], toncoin [TON] and Crypto.com's Cronos ecosystem token [CRO] gained 5%-10% during the same period, helped by continued capital rotation into altcoins. Binance's BNB, Ripple's XRP, Cardano's ADA and dogecoin [DOGE] gave back some gains from earlier this week, retreating 3%-4%.

Ether [ETH] remained flat at around $1,900 Wednesday, but one analyst suggested not going to sleep on the world's 2nd-largest crypto, noting increased blockchain activity could push its price to $3,000.

The CoinDesk Market Index [CMI], a basket of 189 cryptocurrencies, was up 1%.

With the crypto rally now fully expanded past just bitcoin, the total cryptocurrency market capitalization topped $1.31 trillion Tuesday, TradingView data shows. That's the highest reading since late May 2022, marked by the implosion of the Terra ecosystem.

Increasing risk-on sentiment on traditional markets also supported the digital asset space. Safe haven asset gold sank to its lowest price in three weeks, while West Texas Intermediate crude oil (WTI) plummeted 4% to its weakest level since July. The Nasdaq 100 advanced 1.1%, now on a seven-day winning streak.

What's next for bitcoin (BTC)?

As bitcoin's price stays increasingly compressed in the range between $34,000 and $36,000, capital rotation into altcoins is creating a "mini altcoin season," a K33 Research report noted.

It's a typical behavior on the crypto market that traders take profits after a sizable BTC rally and put the proceedings in smaller, riskier tokens.

At the same time, K33 pointed out, accelerating inflows into bitcoin-related funds provides support for BTC's price.

"It’s hard, nearly impossible, not to remain bullish," K33 senior analyst Vetle Lunde said. "An ETF verdict is nine weeks away, and institutional traders provide the only significant heater witnessed in the derivatives market."

"November represents yet another solid month for aggressive accumulation of bitcoin, with an extended plan to distribute, reduce exposure, and reallocate to altcoins once the cat’s out of the bag," Lunde added.