On August 21, according to Bloomberg, K33Research said that signals emerging in the Bitcoin derivatives market show that the risk of "short squeeze" is increasing, which may trigger a sharp rebound in Bitcoin. This indicator is the funding rate of Bitcoin perpetual futures, which helps measure the long or short sentiment of speculators. K33 Research said that the seven-day average annualized funding rate as of August 20 was the lowest since March 2023, indicating that bearish bets dominate. K33Research analysts Vetle Lunde and David Zimmerman wrote in a report, "The perpetual swap funding rate has been negative over the past week, while open interest has increased sharply, indicating that there is aggressive short selling behavior, which structurally creates a favorable situation for short-term squeezes." In this short-term squeeze, an unexpected price jump forces fast money traders to close short positions, further driving the price rebound. Sentiment in the Bitcoin market has been low recently: it suffered losses in August and has struggled to stay above $60,000. Meanwhile, global stock market indices have rebounded to record highs, while gold has also hit new highs.

#BTC