Bitcoin Open Interest, Funding Rates Point To Growing Bullish Sentiment

Bitcoin sentiment has been fluctuating lately. It is not surprising that Bitcoin investors are having difficulty deciding which side to take. There have been many dips and recovery. Retail investors are uncertain about the market. However, over the last week there was some growth in the funding rates, as well the open interest, which suggests that things may be stabilizing.

The Funding Rates are Recovered

The bitcoin funding rate has been below neutral for the last few weeks. These were the same times that the market was in trouble, bringing about a bear trend. But with the last week’s events, there has been a remarkable recovery in the funding rates.

Last week’s end saw the return to normal funding rates for the first-time in a month. It followed the recovery in bitcoin’s price last Friday before it slid back down. While the rates for bitcoin financing have lost their neutrality, they still maintain higher levels than Friday’s BTC recovery.

Bitcoin funding rates

The funding rates are back to neutral Source: Arcane Research| Source: Arcane Research

It is clear that both shorts and long bitcoins still exist. This shows that the market is still uncertain and although it appears to be moving in the direction of bulls because it has reached higher levels, this does not mean it will swing to their favor. Additionally, last week’s recovery to neutral levels did not really change much about the current trend, as funding rates have now spent nine consecutive months at or below neutral levels.

Bitcoin Open Interest Say ‘Short Squeeze’

The open interest, despite the fall in bitcoin prices, hasn’t had an uphill battle like the rest. BTC-denominated open interests have reached new highs, which has led to a variety of short squeezes.

Bitcoin price chart from

The open interest continued to enjoy favorable market conditions, reaching a record high of 421,000 BTC on Wednesday. Even Friday’s short squeeze didn’t do much to reduce open interest. It was still at 418,000 BTC on the first of this week. 

This suggests an unlikely continuation of the current elevated market sentiment. Bitcoin’s price decline also points to this, given that the elevated open interest coincided with a period of price recovery. This also indicates that the bears were in charge of the market during periods when the open interest was high. Bitcoin’s fall below $20,000 is a testament that short traders continue to control the market. 

PYMNTS featured image, Charts from Arcane Research and

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