Bitcoin funding rate plunges to -6%… “Potential for a short squeeze”

As Bitcoin (BTC) prices slid sharply intraday, a steep drop in the funding rate in the derivatives market has prompted analysis pointing to the possibility of a “short squeeze (a sharp rebound driven by short-covering liquidations).”

On the 28th (Korea time), crypto-focused outlet CoinDesk, citing Coinglass data, reported that the funding rate for Bitcoin perpetual futures fell to as low as -6%. That is the second-lowest level in the past three months.

In the perpetual futures market, a negative funding rate indicates that short positions outnumber long positions. The outlet said it viewed this as evidence that “market participants are aggressively betting on further downside in Bitcoin.”

Meanwhile, Bitcoin open interest was tallied as rising from 668,000 contracts to 687,000 contracts while the funding rate was falling.