Bitcoin soared almost 3.5% in the past day, breaking through the $110,000 threshold for the first time in many weeks and touching what seems to be a recent high of $110.3K (chart via TradingView).
Of course, any Bitcoin rally is going to be very closely watched by not only investors but also many analysts trying to get a read on what might be happening in the more speculative corners of the crypto market. So, this rally is already under the microscope, and what we’re seeing is this: the signal we’re getting from the derivatives market is decidedly mixed.
Even while Bitcoin’s spot price keeps surging in the wake of overall crypto market enthusiasm, the structure underlying the asset’s market tells a more complicated story. Data from on-chain and exchanges over the last day illuminate something that a lot of people who’ve been in crypto for any length of time have gotten used to: the reality that Bitcoin is back in the uptrend, again. Being in the uptrend is kind of comforting; it breaks my heart that so much of that comfort is built on the rise of gaze-based financial products.
Spike in Short Liquidations Accompanies Price Rally
One of the recent surge’s primary possible causes seems to be a sudden increase in the number of short positions being liquidated. Yesterday, Bitcoin futures short liquidations hit $5.74 million in a single day. This unwind of forced bearish bets added a lot of push to Bitcoin’s price. And as a result, we accelerated our way up to $110.3K.
The 24-hour simple moving average (SMA) for short liquidations is currently at $768,252.14, indicating that the recent spike is above the norm by a wide margin. This is taken to suggest that there is a rush on to exit short positions, with traders in that camp quite apparently caught off-guard by a rapid upward price shift.
Liquidations of this scale usually stoke short-term volatility, with the positions getting sold off at the market price coming right back into play. It’s sort of a “you kick, I kick” arrangement that can keep the market moving upward for a while and can even make it seem, to some, that we are in a bull market. But this reinflux of pieces that have been forced to the market can make the situation pretty fragile, especially if too many new long positions are being taken and not enough old ones are being reactivated.
Long-Side Premiums and Open Interest Continue to Rise
Concurrently, the premium for long positions has surged significantly over the past 12 hours, now standing at $270,480. This fact implies that traders are more and more keen to shell out a premium for the privilege of staying long, even as prices continue to move upward. In other words, paying a premium to be long is no longer an exclusive club—it’s something more and more traders are opting to do. Believe it or not, this is actually a good sign. It points yet again to the ever-increasing bullishness of the market.
#Bitcoin price rose nearly 3.5% in the past 24 hours, reaching a high of $110.3K. Derivatives suggest potential overheating (rising short liquidations, increasing long-side premium, and growing open interest). However, funding rate uptick is only modest 🧵👇
— glassnode (@glassnode) June 10, 2025
Total number of outstanding derivative contracts—open interest—has also increased in tandem, signaling that new capital is entering the market. Rising open interest can be a healthy sign of growing participation, but when combined with surging long premiums and liquidations, it may indicate a leverage build-up that could precipitate an instability event.
Some risk indicators, however, do remain in check. One closely watched metric for evaluating whether overheating is occurring in the crypto derivatives space is the funding rate for perpetual futures contracts. This rate reflects the cost of holding a position and often spikes when leverage is extremely skewed.
Funding Rates Still Moderate Despite Leverage Buildup
Funding rate data, interestingly, suggests that while the market is clearly speculative, it hasn’t yet reached extreme levels. Across major exchanges, the perpetual futures funding rate for Bitcoin currently ranges from a low of 0.0003% to a high of 0.023%, with an average around 0.0016%. These values are higher than neutral but still well below the excessive levels that have historically preceded sharp reversals.
The uptick we see here in funding is very modest, so what we’re signaling is that interest in holding long positions is growing, but still, traders aren’t being incentivized by upticks in funding to pay obnoxious carry rates to hold onto those long positions. That’s kind of a key distinction. The lack of exorbitant carry rates signals that we might have a bit more room to run before traders are forced to price in the interest mechanism if we keep going up.
The present state is a classic crypto conundrum: although there is unmistakable momentum and enthusiasm behind the recent rally in Bitcoin, the data purportedly points to growing leverage and, uh, speculative bets that may need to be unwound. Without extreme funding rates or blowout open interest, though, the market looks to be in a heightened but not dangerously overheated state.
Volatility spikes, long liquidations, and sudden changes in funding rates will be closely monitored by traders and analysts.
Bitcoin, in the meantime, is trying to hold above a price point of $110,000. On a consolidated basis, it will start sending clearer signals regarding the persistence of its ongoing upward movement.
Disclosure: This is not trading or investment advice. Always do your research before buying any cryptocurrency or investing in any services.
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Source: https://nulltx.com/bitcoin-climbs-above-110k-amid-rising-derivatives-activity-and-leverage-signals/