K33 Research: The Bitcoin derivatives market shows signs of "short squeeze" risk, which may trigger a significant rebound in Bitcoin

ChainCatcher news reports that K33 Research indicates signals emerging from the Bitcoin derivatives market show that the risk of a "short squeeze" is increasing, which could trigger a significant rebound in Bitcoin. This indicator is the funding rate of Bitcoin perpetual futures, which helps measure the bullish or bearish sentiment of speculators.

K33 Research states that the seven-day average annualized funding rate as of August 20 is at its lowest level since March 2023, indicating that bearish bets are dominating. K33 Research analysts Vetle Lunde and David Zimmerman wrote in a report, "The perpetual swap funding rate has been negative over the past week, while open interest has surged, indicating aggressive shorting behavior, structurally creating a favorable situation for a short squeeze in the near term."

In this short-term squeeze, unexpected price jumps force fast-money traders to close their short positions, further driving the price rebound.

Recent sentiment in the Bitcoin market has been quite gloomy: losses were recorded in August, and it has struggled to maintain above $60,000. Meanwhile, global stock indices have rebounded to record highs, and gold has also reached new highs.