Bitcoin derivatives traders signal strong bullish sentiment as funding rate hits multi-month high

Bitcoin’s open interest-weighted perpetual futures funding rate has reached a multi-month high, according to data from Coinglass, indicating that derivatives traders are taking bullish positions.

Analysts expect this positive funding trend to increase further, driven by heightened optimism in the crypto market following Donald Trump's recent U.S. election victory.

"The high positive funding rate underscores bullish sentiment among investors eager to take on more leverage," Deribit CEO Luuk Strijers told The Block. Strijers noted that perpetual futures are significantly outpacing spot markets, reflecting a surge in optimism within the crypto community post-election. "These metrics signal both heightened enthusiasm and growing institutional participation in the crypto markets," Strijers said.

Outlier Ventures Research Lead Jasper De Maere observed that perpetual futures open interest has surged, "which is a bullish confirmation and that positive funding could go up even more."

De Maere highlighted bitcoin's high positive funding rates, currently exceeding 0.04% on Bitmex and 0.03% on Binance, as an indicator of highly leveraged positions that have yet to unwind. "While much of the highly leveraged positions have not been unwound, I think it's general bullish positioning, and it's normal during expected bullruns for synthetic exposure to increase," De Maere told The Block.

The bitcoin open interest-weighted perpetual futures funding rate has reached a multi-month high. Image: Coinglass.

Additionally, according to The Block's Data Dashboard, aggregated bitcoin futures open interest across cryptocurrency exchanges has reached an all-time high. Total aggregated open interest of bitcoin futures has reached over $37 billion on 15 crypto-derivatives exchanges monitored by The Block.

A report by Copper.co projected that bitcoin could reach $100,000 by the time of the U.S. presidential inauguration on January 20, 2025. Copper’s forecast is based on recent spot bitcoin exchange-traded fund (ETF) accumulation trends, which suggest that ETFs may hold approximately 1.1 million bitcoin by inauguration day.

"We have back-tested the ETF accumulation trend against potential price ranges, suggesting a $100,000 bitcoin is quite possible by the time the 47th U.S. President heads to the Capitol for inauguration on January 20, with ETFs holding approximately 1.1 million bitcoins," Copper.co Head of Research Fadi Aboualfa said.

Aboualfa noted that Trump's previous presidency saw bitcoin reach two all-time highs, though the current environment has a stronger dollar backdrop compared to the dollar weakening seen in the prior cycle.