The Bitcoin market has just undergone significant volatility as the price reached an all-time high. Many futures traders have over-leveraged on long positions, causing the funding rate to rise to 0.06-0.08%, indicating that the market is overheated.

As the price corrected, 42 million USD worth of long positions were liquidated, cooling down the leverage and reducing the funding rate to 0.008%. This suggests that long-term traders are fearful due to losses.

Interestingly, as large futures positions were liquidated and the price fell, traders began betting on short positions. However, the Coinbase premium index shows that American investors are buying back cash, pushing the price to a new peak of 90k USD.

Short-term traders are sensitive to volatility but often act contrary to their predictions.