Risk Appetite is Increasing in Bitcoin, Volatility Probability is Rising: Analysis Company Warned Against Potential Movement!

The crypto analysis firm Glassnode presented striking data regarding the Bitcoin (BTC) market in its latest report. According to the company’s analysis, as investors’ risk appetite increases, the likelihood of rising volatility in the market also strengthens.

According to Glassnode data, open positions in the futures markets have significantly increased recently. Since the beginning of March, there has been a 15.6% rise, accumulating a total of 281,000 BTC in open positions. This indicates that investors have started to use more leverage and that price movements could become more abrupt. In particular, the likelihood of sudden price changes triggering liquidations or stop-loss orders for investors is increasing.

Despite this, the average funding rate has decreased to a level of %–0.023, indicating that short positions are predominantly being opened in the market. The funding rate can be defined as an interest rate paid to keep the price difference between futures contracts and the spot market in balance. Negative funding implies that more investors are taking positions that Bitcoin will decline.

According to the analysis company, this situation could pave the way for a short squeeze scenario in which these investors may have to close their positions if the upward momentum continues.

The report also stated that the 7-day average of premiums paid for long positions has fallen to as low as $88,000 per hour, and this trend continues. This indicates that investors’ interest in positions anticipating an increase in Bitcoin has decreased, while the overall trend of the market is currently weighted towards short.