Short squeeze alert as crypto bears surge amid recession fears
The cryptocurrency market experienced a massive crash on August 5, following macroeconomic news and other finance markets amid recession fears. Crypto short-sellers have increased their positions as a bearish sentiment surged, creating a favorable scenario for a short squeeze. Overall, derivatives crypto trading and open interest (OI) are leaning toward short positions, according to funding rates data from CoinGlass . The funding rate heatmap shows the top 30 cryptocurrencies ranked by OI have a clear dominance of negative funding APR. Essentially, a negative funding rate means short sellers must pay an APR on their positions to long-position traders. This is made to balance the market’s incentives and is a usual cause of short squeezes. The opposite happens with positive funding rates when bull traders pay the bears to keep their positions open. Picks for you ...