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K33 Research: The Bitcoin derivatives market shows a "short squeeze" risk signal, which may trigger a sharp rebound in Bitcoin

CointimeCointime2024/08/21 06:55
By:Cointime

On August 21st, according to Bloomberg, K33 Research stated that signals in the Bitcoin derivatives market indicate an increasing risk of "short squeeze", which could trigger a significant rebound in Bitcoin. This indicator is the funding rate of Bitcoin perpetual futures, which helps measure the sentiment of speculators' long or short positions. K33 Research stated that the seven-day average annualized funding rate as of August 20th is the lowest level since March 2023, indicating that bearish bets dominate. K33 Research analysts Vetle Lunde and David Zimmerman wrote in a report, "The perpetual swap funding rate has been negative for the past week, while open interest has sharply increased, indicating aggressive short selling behavior, creating a favorable situation for short-term squeezing structurally." In this short-term squeeze, unexpected price jumps force fast fund traders to close short positions, further pushing up prices. The sentiment in the Bitcoin market has been low recently: losses occurred in August and it has been difficult to maintain above $60,000. At the same time, global stock market indices have rebounded to record highs, and gold has also reached new highs.

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