The world’s biggest cryptocurrency Bitcoin (BTC) continues to remain in a price range between $58,000 and $60,000. With no direction clear, the market for derivatives has sent a signal that suggests BTC could see soaring prices.
Bitcoin Shorting is on the Rise
According According to K33 Research (a crypto-research firm), the funding rate of Bitcoin perpetual futures is at its lowest level since March 2023 when investors were rattled by the US bank failures. The cryptocurrency is being shorted in a large number of cases. Vetle Lunde, a K33 analyst and David Zimmerman published a report:
Over the last week, perpetual swap funding rates averaged negative values while open interest increased sharply. The increase in open interest suggests that shorting is becoming more aggressive, creating structurally a situation ripe to a squeeze.
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When a price increases unexpectedly, traders are forced to make a quick decision. short positions Close their bets to further fuel the rally. It can also fuel Bitcoin’s price as traders cover their short positions.
K33 Research noted further that in the perpetual markets, the notional open interests, or the value total of outstanding contracts rose by approximately 29,000 BTC within the past seven days.
The analysts have estimated the average seven-day annualized rate. funding rate The negative 2.5% on the 20th of August was an unusual backdrop.
It is possible that this combination indicates that traders were actively building their short positions. A potential short squeeze could then push the price up above the key resistance walls, as they haven’t been broken yet in spite of the fact that the market has been struggling with an apparent lack bullish catalysts.
BTC: Short-Term Bullish Pressure?
As per an Inspo Crypto analysisThe data on options suggests that $60.500 is still a challenge to bulls and there could be increased volatility in the area. The Implied Volatility curve (IV), which shows an increase around $60,500, is a key indicator.
The high delta and gamma value, which measures the option’s sensitivity to price changes of the underlying asset, suggests traders are expecting significant price movement around this area.
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Market sentiment is a mixture of bullish as well as bearish. The heavy usage of bullish strategies Bull Call Spreads or Reverse Put Calendars suggest a positive outlook for traders. The increasing trend towards negative values suggests that traders want to protect themselves from the downside by using put options.
Analysts believe that increased activity could indicate a higher probability of an unsuccessful retest. Option markets may also exacerbate the price movement.
After falling below the $49,900 mark in the first two weeks of this month, it is important that the BTC rate closes the week above the critical level. This will allow the price to recover over the next two weeks.
In the opposite direction, lower levels of support would put the biggest cryptocurrency in the market at risk. correction, As seen over the last few months, after hitting its highest level of $73,700 back in March.
BTC’s price is currently $59 870. This represents a nearly 2% increase in just the last 24 hour.
Chart from TradingView.com, image from DALLE
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Source: www.newsbtc.com
