{"id":491681,"date":"2022-05-30T19:00:15","date_gmt":"2022-05-30T19:00:15","guid":{"rendered":"https:\/\/ktsl888.com\/?p=491681"},"modified":"2024-06-11T14:20:12","modified_gmt":"2024-06-11T14:20:12","slug":"bitcoin-on-chains-long-squeeze-futures-market","status":"publish","type":"post","link":"https:\/\/ktsl888.com\/news\/bitcoin-on-chains-long-squeeze-futures-market\/","title":{"rendered":"Bitcoin On-Chain Data Signals A Long Squeeze Brewing In Futures Market"},"content":{"rendered":"
On-chain data shows the Bitcoin open interest is sharply rising, a sign that a long squeeze may be brewing in the crypto futures market.<\/p>\n
As pointed out by an analyst in a CryptoQuant post<\/a>, the futures market may be heading towards a long squeeze in the near future.<\/p>\n The “open interest<\/a>” is an indicator that measures the total amount of Bitcoin futures positions currently open on derivatives exchanges. It includes both long and short positions.<\/p>\n An increasing value of the metric suggests users are opening more positions right now. Such a trend can lead to higher volatility in the crypto’s price.<\/p>\n On the other hand, a lowing open interest can mean positions on exchanges are closing down. A rapid swing in the price can cause a mass liquidation, sharply taking the indicator’s value down.<\/p>\n Related Reading |\u00a0Bitcoin Bearish Signal: Whale Ratio Continues To Stay At High Value<\/a><\/em><\/strong><\/p>\n These liquidations cascade together, amplifying the price move. Such an event is called a long or short liquidation “squeeze” (depending on the direction of the price change).<\/p>\n Now, here is a chart that shows the trend in the Bitcoin funding rates over the past couple of weeks:<\/p>\n <\/p>\n As you can see in the above graph, the Bitcoin open interest has observed a significant increase in the last few days.<\/p>\n The chart also includes the data of another indicator, the “funding rates<\/a>.” This metric measures the periodic fee that futures traders have to pay each other.<\/p>\n A positive value shows there are more long traders in the market at the moment as they are paying a premium to keep their positions.<\/p>\n On the contrary, a negative value implies a short sentiment is dominant right now. Looking at the graph, it seems like the Bitcoin funding rate is positive currently.<\/p>\n This means that most of the recent increase in the open interest has to be because of new long positions opening.<\/p>\n Related Reading |\u00a0Bitcoin Dominance Remains High As Market Sell-Offs Settle<\/a><\/em><\/strong><\/p>\n Historically, a very high open interest has usually resulted in a liquidation squeeze. Since longs are dominant right now, a long squeeze is probable if the price observes a steep decline.<\/p>\n At the time of writing, Bitcoin’s price<\/a> floats around $30.5k, up 1% in the last seven days. Over the past month, the crypto has lost 21% in value.<\/p>\n The below chart shows the trend in the price of the coin over the last five days.<\/p>\n <\/p>\n On-chain data shows the Bitcoin open interest is sharply rising, a sign that a long squeeze may be brewing in the crypto futures market. Bitcoin Open Interest Has Observed Rise Recently, While Funding Rates Remain Positive As pointed out by an analyst in a CryptoQuant post, the futures market may be heading towards a long squeeze in the near future. The “open interest” is an indicator that measures the total amount of Bitcoin futures positions currently open on derivatives exchanges. It includes both long and short positions. An increasing value of the metric suggests users are opening more positions right now. Such a trend can lead to higher volatility in the crypto’s price. On the other hand, a lowing open interest can mean positions on exchanges are closing down. A rapid swing in the price can cause a mass liquidation, sharply taking the indicator’s value down. Related Reading |\u00a0Bitcoin Bearish Signal: Whale Ratio Continues To Stay At High Value These liquidations cascade together, amplifying the price move. Such an event is called a long or short liquidation “squeeze” (depending on the direction of the price change). Now, here is a chart that shows the trend in the Bitcoin funding rates over the past couple of weeks: Looks like the value of the metric has moved up recently | Source: CryptoQuant As you can see in the above graph, the Bitcoin open interest has observed a significant increase in the last few days. The chart also includes the data of another indicator, the “funding rates.” This metric measures the periodic fee that futures traders have to pay each other. A positive value shows there are more long traders in the market at the moment as they are paying a premium to keep their positions. On the contrary, a negative value implies a short sentiment is dominant right now. Looking at the graph, it seems like the Bitcoin funding rate is positive currently. This means that most of the recent increase in the open interest has to be because of new long positions opening. Related Reading |\u00a0Bitcoin Dominance Remains High As Market Sell-Offs Settle Historically, a very high open interest has usually resulted in a liquidation squeeze. Since longs are dominant right now, a long squeeze is probable if the price observes a steep decline. BTC Price At the time of writing, Bitcoin’s price floats around $30.5k, up 1% in the last seven days. Over the past month, the crypto has lost 21% in value. The below chart shows the trend in the price of the coin over the last five days. The value of Bitcoin seems to have surged past the $30k mark | Source: BTCUSD on TradingView Featured image from Unsplash.com, charts from TradingView.com, CryptoQuant.com<\/p>\n","protected":false},"author":542,"featured_media":491684,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[3],"tags":[428,86063,84331,1119,1144],"class_list":["post-491681","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news","tag-bitcoin","tag-bitcoin-futures-market","tag-bitcoin-long","tag-btc","tag-btcusd"],"acf":[],"yoast_head":"\nLooks like the value of the metric has moved up recently | Source: CryptoQuant<\/a><\/pre>\n
BTC Price<\/h2>\n
The value of Bitcoin seems to have surged past the $30k mark | Source: BTCUSD on TradingView<\/a><\/pre>\n
Featured image from Unsplash.com, charts from TradingView.com, CryptoQuant.com<\/pre>\n","protected":false},"excerpt":{"rendered":"