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

Information reveals the Bitcoin funding price has elevated to a comparatively excessive optimistic worth not too long ago, one thing that might result in an extended squeeze available in the market.

Bitcoin Funding Charge Turns into Optimistic As Open Curiosity Rises Up

As identified by an analyst in a CryptoQuant submit, the BTC funding price has a optimistic worth for the time being.

The “open curiosity” is an indicator that measures the overall quantity of positions at the moment 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. Extra leverage often results in the crypto’s worth turning extra risky.

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However, low values of the open curiosity may end up in 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:

Seems to be just like the metric's worth has elevated not too long ago | Supply: CryptoQuant

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

One other indicator, the “funding price,” measures the periodic payment 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 for the time being.

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

Bitcoin Funding Rate

The worth of the indicator appears to have been inexperienced not too long ago | Supply: CryptoQuant

From the graph, it’s obvious that the Bitcoin funding price has a comparatively excessive optimistic worth at the moment. Which means 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.

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

BTC Value

On the time of writing, Bitcoin’s worth 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 worth of BTC has climbed up over the previous couple of days | Supply: BTCUSD on TradingView
Featured picture from Aleksi Räisä on Unsplash.com, charts from TradingView.com, CryptoQuant.com
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