Key Takeaways
Bitcoin Futures sentiment turns positive after five consecutive days in negative territory. Buyers returned after nine days, pushing Bitcoin’s funding rate to a weekly high.
Since hitting $124k a week ago, Bitcoin [BTC] has experienced a strong downtrend, reaching a low of $111.9k.
In fact, at the time of writing, Bitcoin was trading at $112,920, marking a 5.3% decline on weekly charts.
Amid this price drop, investors are rushing into futures, and demand has recovered significantly.
Selling pressure from shorts cool down
According to CryptoQuant’s analysis, Bitcoin’s Futures Composite Sentiment Index turned positive after being negative for five days.
A shift into the positive zone indicates that aggressive buyers now dominate futures trade at the margin. Therefore, selling pressure from shorts has eased, and dip buyers have jumped to fill the gap.
Source: CryptoQuant
When market sentiment shifts, it often drives the spot price in the same direction, triggering short covering and attracting liquidity that chases momentum.
For instance, during the dip in early August, the sentiment metric fell below -1, then quickly rebounded into positive territory, pushing Bitcoin up to $124k.
More recently, after dipping to -0.7, the metric has again turned positive. Could this signal another rally?
Buyers step in
Notably, with selling pressure from shorts easing, buyers jumped into the market.
According to CryptoQuant’s data, the Taker Buy Sell Ratio spiked into positive territory after being negative for nine consecutive days.
Source: CryptoQuant
On the 22nd of August, this metric saw around 1.05, indicating a higher buying pressure compared to selling, a clear accumulation signal.
On top of that, Bitcoin’s Funding Rate surged to a weekly high of 0.0095, reflecting a higher demand for longs.
Thus, these buyers entered the market to take longs in an attempt to cover easing shorts.
Source: CryptoQuant
Not in a hurry to sell!
Surprisingly, despite minimal price performance, investors in the Futures market anticipate less volatility.
Options Implied Volatility(IV) was extremely low, sitting around 38%, at press time, indicating the market expects less dramatic moves.
Source: Checkonchain
Also, the Futures Sell Side Risk Ratio sat at 0.00126, which is relatively low. At this level, it suggests markets are quiet and there’s less incentive to sell for holders in the futures.
A combination of low IV and low Sell Side Ratio implied that Bitcoin was in low liquidity and lower volatility, where holders lack significant pressure to sell.
Is a big move brewing for BTC?
According to AMBCrypto’s analysis, Bitcoin is undergoing a regime shift in the futures market, with long positions gradually overtaking shorts.
This shift has given buyers the upper hand, while existing holders remain reluctant to sell, largely due to declining profitability and increasing unrealized losses.
Historically, such conditions often precede a surge in volatility, suggesting a major price move may be on the horizon. If the pattern mirrors early August, Bitcoin could stage a strong rebound from its recent dip.
A recovery would likely push Bitcoin back to $115k, with a potential move toward $117k.
However, if long positions become overheated while prices stagnate, a drop below $110,799 is possible, with support expected around $109,760.
