10x Research: Refer to the previous short-covering rally in Circle to find the next crypto stock opportunity.

10x Research, in an analysis published on its X platform, pointed out that since analysts indicated a potential short-covering rally in Circle's stock price ahead of its February 20th earnings report, its share price surged by over 80% in less than three weeks. Although some hedge funds had already begun reducing their positions before the catalyst (previously, short positions accounted for 17.8% of outstanding shares), they may have incurred approximately $1 billion in paper losses during the price surge. 10x Research suggests investors pay attention to the overall hedge fund short positions in the crypto stock sector to identify the next potential trading opportunity. Short covering provides strong upward momentum for crypto stocks, enabling them to outperform Bitcoin. While the surge may not be as explosive as Circle's previous performance, the risk-reward ratio remains attractive, and it offers downside protection, making it suitable for the current market environment.