Data indicates that users of derivatives exchanges are continuing to short Bitcoin despite the cryptocurrency’s recent recovery surpassing the $57,000 mark. The Bitcoin Funding Rate remains negative on major exchanges.
According to analytics firm Santiment, investors have been shorting BTC for the past few days. The key indicator here is the “Funding Rate,” which tracks the periodic fees that derivatives contract traders on a given exchange are currently paying each other. When this metric is positive, long contract holders pay a premium to short investors to maintain their positions, indicating a bullish sentiment among the majority. Conversely, a negative indicator suggests that short positions outnumber long ones, signaling a bearish mentality in the market.
Recent data reveals that the Bitcoin Funding Rate on platforms such as Binance and BitMEX has been consistently negative in recent days. This trend emerged around the cryptocurrency’s recent price bottom, implying that derivatives users were anticipating further declines. However, this bearish outlook did not materialize as Bitcoin’s price has been on the rise since, likely facilitated by the liquidation of these positions.
In the last 24 hours, Bitcoin has surged past the $57,000 level. CoinGlass data shows that this upward move, alongside gains in the broader cryptocurrency sector, has led to nearly $123 million in liquidations. Of this amount, more than $88 million involved short positions, with Bitcoin shorts alone accounting for approximately $34 million of the total. Despite these significant liquidations, the Funding Rate remains negative, indicating that bearish speculators continue to dominate the market.
This persistence in shorting positions could potentially lead to further liquidations, thereby fueling additional price increases. It remains to be seen if Bitcoin will continue to defy the expectations of the majority of derivatives investors.
At the time of writing, Bitcoin is trading at around $57,000, a gain of more than 3% over the last 24 hours.
