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

News on August 21, according to Bloomberg, K33Research stated that signals emerging from the Bitcoin derivatives market indicate an increasing risk of a "short squeeze", 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 said that as of August 20, the seven-day average annualized funding rate was at its lowest level since March 2023, indicating that bearish bets are dominant. Analysts Vetle Lunde and David Zimmerman from K33Research wrote in a report: "The perpetual swap funding rate has been negative over the past week while open contracts have surged sharply, suggesting aggressive short-selling behavior and structurally creating favorable conditions for a short-term squeeze." In such short-term squeezes, unexpected price jumps force fast money traders to close their short positions further driving up prices. The recent mood in the bitcoin market has been very low: it suffered losses in August and struggled to stay above $60,000. Meanwhile global stock indices have rebounded to record highs and gold has also reached new highs.