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Today Bitcoin (BTC) price rose to a new all-time high at $ 44,900 shortly after Tesla announced an investment of $ 1.5 billion. This event caused $ 555 million worth of shorts to be liquidated in two hours and it happened when Bitcoin futures open interest rate hit $ 13.7 billion, which is just 3% below its historical high.

These price movements have drastically increased the cost of carrying long positions, especially for those who use perpetual futures. This indicator raised a yellow flag about the leverage of those investors and their possible price impact.

BTC futures open interest in USD. Source:

As shown above, total open interest on BTC futures just hit a record high of $ 15 billion.

Whenever unexpected positive news hits the market, it is normal for players to take extreme leverage positions. This happens both for the short sellers, whose margins are shrinking due to losses, and for the long buyers who tend to increase their positions.

Shorts with insufficient margin are being liquidated as their positions are forcibly terminated and their leverage decreases. On the other hand, the longs benefit, so increasing position does not increase their leverage as much.

After the first pump, the funding rate is expected to increase and the fees that longs pay to keep their perpetual futures (inverse swaps) open will increase.

BTC perpetual futures 8-hour funding rate. Source:

As shown above, the 8-hour wages charged to offset the ultimate leverage imbalance between longs and shorts has just hit 0.25%. This percentage is equivalent to 5.4% per week, which is quite significant for its holders.

Note that even as Bitcoin continues to appreciate, as seen on January 29th, the funding rate tends to self-adjust. Two main reasons fueled this: leveraged buyers who deposited more money and arbitrage desks who shorted perpetual futures while buying spot BTC at the same time.

A funding rate ranging from 0.05% to 0.10% per 8 hours is standard and expected during a bull market. This indicator would mean a monthly amount of 4.6% to 9.4% and would not be problematic for leveraged longs.

To understand how whales and arbitrage desks have positioned during this time, it is helpful to take a closer look at the long-to-short ratio of the top traders on major exchanges.

OKEx dealers bought before the pump

Top traders BTC long / short ratio. Source:

Binance top traders had a net long position of 33% leading up to the February 8 rally, slightly above their 26% 2-week average. As soon as Tesla news hit the press, they hiked the longs and put the indicator at 46%, the highest level in almost a month.

Huobi top traders, on the other hand, remained relatively untouched by the news. Their net position was 0.74, which means that 26% preferred shorts over February 8th. Their current net short position of 28% remains in line with the previous 2-week average.

Finally, the OKEx top traders increased their net long position from Feb. 6 to the early morning of Feb. 8, reaching a net long position of 14%. Somehow correctly predicting the rally, those traders aggressively reduced net long positions as BTC hit its all-time high.

The currently high funding rate may be an inconvenience to longs, but currently there are no signs of excessive leverage by buyers. At least for those big market makers and arbitrage desks that make up the best traders of most exchanges.

This suggests that there is room for further Bitcoin price hike.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the view of Cointelegraph. Every investment and every trade move carries risks. You should do your own research when making a decision.