Bitcoin Long Squeeze Risk Looms as Open Interest Drops and Funding Rates Climb: CryptoQuant

BitcoinWorld Bitcoin Long Squeeze Risk Looms as Open Interest Drops and Funding Rates Climb: CryptoQuant Bitcoin derivatives markets are flashing a warning signal that traders may soon face a long squeeze, according to CryptoQuant analyst Axel Adler Jr.

In a recent analysis, Adler noted that open interest in Bitcoin futures has fallen while funding rates for long positions have climbed — a combination that historically precedes forced liquidations of leveraged bulls.

Open Interest Declines While Funding Rates Rise Adler reported that Bitcoin open interest dropped approximately 3.8% to 318,000 BTC on August 21, down from 331,000 BTC on August 31 (local time).

Over the past 24 hours, positions totaling 2,850 BTC were liquidated, signaling that the derivatives market is now in a deleveraging phase following a short squeeze.