Saying "The risk of 'short squeeze' has increased in Bitcoin", K33: We can see sharp movements
Crypto research firm K33 Research wrote that open positions have increased sharply while funding rates are hovering at negative levels, creating a favorable ground for a short squeeze.
According to crypto research firm K33 Research, there are signs that the risk of a short squeeze in the derivatives market that could trigger sharp rallies in Bitcoin is increasing.
The company, which tracks the funding rates of Bitcoin-based futures contracts, pointed out that the seven-day average annual funding rate was the lowest since March 2023, when bank bankruptcies in the U.S. shook the market. According to the news of Bloomberg, the note published by company analysts Vetle Lunde and David Zimmerman said, "While the funding rates were at average negative levels over the past week, the open position has increased sharply. This shows that there is an aggressive deficit and that there is a structurally suitable ground for 'short squeeze'.” They commented.
Stating that the open position size increased equivalent to 29 thousand BTC last week, and the average funding rate was minus 2.5 percent yesterday, the analysts said, "In addition to the negative funding rate, such a rapid increase in open positions is a relatively rare situation."
Short squeeze refers to the rush of investors in a short position in that asset to reduce their losses as a result of the rapid rise in the price of an asset in the financial markets. This causes the price of the asset to increase even more.
