Bitcoin Funding Rates Are At Highest Levels Since February
As pointed out by an analyst in a CryptoQuant , longs have accumulated in the market recently. The “funding rates” is an indicator that keeps track of the periodic fee that traders on the futures market are exchanging between each other right now.
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The value of the metric seems to have been quite high in recent days | Source:
As displayed in the above graph, the Bitcoin funding rates have surged during the past day as the cryptocurrency’s price has recovered back above the $29,000 level.
The rise implies that new long positions have appeared on the market, and the gap between the shorts and longs has widened. Following this increase, the funding rates have hit highly positive levels not witnessed since back in February of this year.A “squeeze” is an event where a sharp swing in the price sets off a high volume of liquidations at once. Such liquidations only end up providing further fuel for the price move, thus prolonging it and causing even more liquidations. As such, liquidations can be imagined to cascade during a squeeze.
Whenever the futures market becomes overheated, the chances of this mass liquidation event taking place can go up. Generally, a squeeze is more probable to effect the side that has the larger amount of contracts. Naturally, this side would be reflected in the funding rates. As the indicator’s value is highly positive right now, a long squeeze could have reasonable chance of happening. If one does take place in the near future, then the Bitcoin market could go down in a similar way as it did back in February.BTC Price
At the time of writing, Bitcoin is trading around $29,500, up 1% in the last week.BTC had recovered to $30,000 earlier today, but has since retraced to lower levels | Source: