Bitcoin’s derivatives market is showing a curious split, with open interest falling 3.8% since August 21, from 331,100 to 318,600 BTC, while funding costs for long positions have risen quickly. Analyst Axel Adler Jr. warns that this combination could trigger a long squeeze if traders start rebuilding leverage while maintaining an increasingly bullish bias. Over $9.7 billion in positions have been liquidated over the past two weeks, including $6.55 billion in shorts and $3.16 billion in longs. Bitcoin briefly dipped below $77,000 before recovering to $79,000, with $79,700 emerging as a key technical level for confirmation.
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