Bitcoin is currently making a bid to reclaim the $64,000 mark following a brief dip to $63,000, a reaction triggered by recent military actions involving the U.S. and Israel in Iran. The cryptocurrency’s latest fluctuations are not just impacting its price, but have also affected traders’ positioning in the perpetual futures market, with funding rates now sitting at a striking -6%. This figure represents the second lowest funding rate recorded in the past three months, reminiscent of February 6, when Bitcoin bottomed out near $60,000.
Perpetual futures funding rates are crucial indicators in trading, reflecting the periodic payments exchanged between long and short traders. In a scenario where these rates are positive, traders holding long positions pay a premium to those holding short positions. Conversely, when rates dip into negative territory, it’s the shorts that compensate the longs. The current deep negative funding rates are indicative of aggressive short positioning and widespread bearish sentiment, suggesting that many traders are willing to pay to maintain their bets against the asset.
In another notable development, the coin-margined open interest has seen an increase from 668,000 BTC to 687,000 BTC over the past 24 hours. This rise in open interest, viewed in BTC terms, helps mitigate distortions created by price volatility. The increase in open interest, coupled with the negative funding rates, points to a growing participation in the market, with many traders positioning themselves for further potential downturns.
In a dramatic turn of events, over $500 million in cryptocurrency positions were liquidated within the last 24 hours, according to data from CoinGlass. The majority of these liquidations were long positions, which accounted for more than $420 million. This significant selling pressure underscores the extent of forced liquidations as the market experienced downward blows in prices.
