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Cryptocurrency analysis firm Glassnode has released some remarkable data on the Bitcoin (BTC) market in its latest report. According to the company’s analysis, as investors’ risk appetite increases, the likelihood of increased volatility in the market is also increasing.
According to Glassnode data, open interest in futures markets has increased significantly recently. Since the beginning of March, open interest has accumulated to a total of 281 thousand BTC, up 15.6%. This suggests that investors are starting to use more leverage and price movements may become more abrupt. In particular, the probability of sudden price changes liquidating investors or triggering stop-loss orders increases.
Despite this, the average funding rate has fallen to -0.023%, indicating that the market is predominantly short. The funding rate can be defined as an interest rate paid to balance the price difference between futures contracts and the spot market. Negative funding implies that more investors are positioning for Bitcoin to fall.
According to the analyst firm, this could pave the way for a short squeeze scenario in which these investors may be forced to close their positions if the bullish momentum continues.
In addition, the report stated that the 7-day average of premiums paid for long positions has fallen to $88,000 per hour and this trend continues. This reveals that investors’ interest in positions that Bitcoin will rise has decreased, and the general trend of the market is currently short-heavy.
*This is not investment advice.
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