Bitcoin breaks through $109,000 as derivatives trading activity surges

[Block Rhythm] On July 3, the price of Bitcoin recently soared from $105,200 to $109,500, mainly due to a significant rise in derivatives trading activity, indicating that market momentum is recovering. The open interest (OI) at major futures exchanges surged by 10%, amounting to approximately $3.2 billion, which indicates a large influx of funds into the market. This rise is primarily driven by long positions, suggesting that the market is confident in further increases in Bitcoin.

Despite the rise in price and open interest (OI), the funding rate in the perpetual contract market remains stable. This indicates a balanced sentiment among long and short traders, and more importantly, this surge is not driven by excessive leverage. From a bullish perspective, a stable funding rate during the price rise suggests that the upward trend may be more sustainable. Accompanying this trend, there has been a significant short squeeze in the market, with over $196 million in short positions closed in the past 12 hours. This strong wave of position closing is likely to have accelerated Bitcoin's breakthrough of key resistance levels.

In addition, the Bitcoin premium index on a certain trading platform has remained high throughout the trend, further validating the strength of buyers. This indicator tracks the price differences between a certain trading platform and other major exchanges, indicating that there is ongoing spot buying pressure from institutional and retail investors in the United States, which further strengthens the bullish outlook.