Bitcoin Funding Rate Turns Highly Positive, Long Squeeze In The Making?

    Data reveals the Bitcoin funding fee has elevated to a comparatively excessive optimistic worth lately, one thing that might result in an extended squeeze available in the market.

    Bitcoin Funding Rate Becomes Positive As Open Interest Rises Up

    As identified by an analyst in a CryptoQuant post, the BTC funding fee has a optimistic worth in the meanwhile.

    The “open interest” is an indicator that measures the entire quantity of positions at present open within the Bitcoin futures market.

    When the worth of this metric is excessive, it means there may be a considerable amount of leverage concerned available in the market proper now. Excess leverage normally results in the crypto’s value turning extra unstable.

    Related Reading | When Will The Extended Stretch Of Extreme Fear In Crypto End?

    On the opposite hand, low values of the open curiosity can lead to lesser volatility within the BTC market as there isn’t a lot leverage concerned within the futures market.

    Now, here’s a chart that reveals the pattern within the open curiosity over the previous week:

    Bitcoin Open Interest

    Looks just like the metric's worth has elevated lately | Source: CryptoQuant

    As you may see within the above graph, the Bitcoin open curiosity has noticed an increase in latest days. This might imply that the crypto might face larger volatility within the coming days.

    Another indicator, the “funding rate,” measures the periodic charge that merchants on derivatives exchanges pay one another to carry onto their positions. This metric tells us how the open curiosity is split between the lengthy and brief merchants in the meanwhile.

    Related Reading | Bitcoin Manage To Hold Its Own As Wall Street Open With Losses, Analysts Weigh In On Bottom

    The beneath chart reveals how this indicator’s worth has modified in the course of the previous seven days.

    Bitcoin Funding Rate

    The worth of the indicator appears to have been inexperienced lately | Source: CryptoQuant

    From the graph, it’s obvious that the Bitcoin funding fee has a comparatively excessive optimistic worth at present. This signifies that there are a better variety of longs current available in the market proper now.

    Since lengthy merchants are paying a premium to maintain their positions (which is why the speed is optimistic), the general market sentiment is leaning in direction of bullish.

    However, with the excessive open curiosity values, it’s doable that any massive swing within the value could cause what’s known as a “long squeeze,” which is an occasion the place mass liquidations of lengthy positions cascade collectively and push the value additional down.

    BTC Price

    At the time of writing, Bitcoin’s value floats round $20.9k, down 2% within the final week. Over the previous month, the crypto has misplaced 5% in worth.

    Bitcoin Price Chart

    The value of BTC has climbed up over the previous couple of days | Source: BTCUSD on TradingView
    Featured picture from Aleksi Räisä on, charts from,

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