After much analysis, all the talk is reasonable, but the result is no increase.
K33 Research: "Short squeeze" risk signals appear in the Bitcoin derivatives market, which may trigger a sharp rebound in Bitcoin
On August 21, according to Bloomberg, K33 Research said that signals appearing 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.
"Perpetual swap funding rates have been negative over the past week while open interest has increased dramatically, suggesting aggressive shorting, structurally creating a favorable situation for a short squeeze," K33 Research analysts Vetle Lunde and David Zimmerman wrote in a report.
In such a short squeeze, an unexpected price jump forces fast money traders to close out short positions, further fueling a price rally. Sentiment in the bitcoin market has been sluggish recently: it has lost money in August and has struggled to stay above $60,000. Meanwhile, global stock market indices have rallied back to record highs, while gold has also hit new highs.
