Insight: Bitcoin Funding Rate Drops to -6%, Potential Short Squeeze Setup Forming

BlockBeats News, February 28, Bitcoin dropped to $63,000 in the United States and Israel after the attack on Iran, and the perpetual contract funding rate dropped to -6%, the second lowest level in nearly three months. The last time the funding rate reached this level was on February 6, when Bitcoin bottomed out around $60,000.

CoinGlass data shows that in the past 24 hours, the BTC-denominated open interest of futures contracts increased from 668,000 BTC to 687,000 BTC. Over $500 million worth of cryptocurrency positions were liquidated, with long positions accounting for over $420 million in liquidations.

A deeply negative funding rate usually indicates a concentration of short positions, with traders willing to pay a premium to maintain bearish bets. As the BTC-denominated open interest rises and the funding rate is negative, it indicates increased market participation and more traders betting on the downside. Currently, Bitcoin is attempting to reclaim $64,000. (CoinDesk)