I just saw an interesting market signal: the funding rate for perpetual contracts has dropped to -6%, the second-lowest level in nearly three months. Simply put, a negative funding rate means shorts are paying longs, which usually occurs during extremely bearish market conditions.



Even more interesting, open interest has increased from 668,000 BTC to 687,000 BTC over the past 24 hours, indicating traders are not reducing leverage; instead, they are continuing to add to their short positions in this environment of negative funding rates. In such a situation, if the market rebounds, these aggressive shorts could be forced to close their positions, potentially triggering a short squeeze.

Bitcoin is currently trying to recover around $64,000, and such a low funding rate is definitely worth paying attention to. If the bulls can hold steady, the negative funding rate could serve as a trigger for a rebound.
BTC0.01%
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