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Data shows Bitcoin shorts have been piling up on cryptocurrency exchanges Binance and Deribit during the past few days. Bitcoin Funding Rates On Binance & Deribit Are Deep Red Right Now According to data from the analytics firm Santiment, traders on the derivative market have continued to bet against the cryptocurrency recently. The relevant indicator here is the “funding rate,” which keeps track of the periodic fee that derivative contract holders on an exchange are paying each other right now. When this metric has a positive value, it means that the long traders are paying a premium to the short traders in order to hold onto their positions. Such a trend suggests that the majority sentiment on the given exchange is bullish currently. On the other hand, the metric being under the zero mark implies the traders on the platform hold a bearish mentality at the moment, as the shorts are the dominant force. Related Reading: Is Bitcoin Bull Run Coming Soon? What Network Fundamentals Say Now, here is a chart that shows the trend in the Bitcoin funding rates for Binance and Deribit over the past month: Looks like the value of the metric has been quite red in recent days | Source: Santiment on X As displayed in the above graph, the Bitcoin funding rate for both of these exchanges had been mostly positive during the last third of August and the starting third of this month, implying that the majority of the traders had been longs. The bets of these holders had failed, however, as the price had seen an overall downtrend in this period. Since the rebound earlier this month, though, the sentiment has flipped in the market as shorts have piled up on both of these platforms. These short traders haven’t been successful so far, either, as the value of the cryptocurrency has seen net growth since they have appeared. Historically, the market has actually been more likely to go against the expectation of the majority, so this pattern may be in line with that. The reason why the asset would move against the bets of these contract holders is that mass liquidation events, called squeezes, become more likely to happen the more lopsided the sector is. A large amount of long liquidations can amplify crashes, while short liquidations can provide the fuel for upward surges. Since Bitcoin is still seeing aggressive shorting, it may be a positive sign for the cryptocurrency’s current price rise, as a potential short squeeze could help it extend further. Related Reading: Bitcoin May Not See Lasting Bullish Momentum Until This Happens Interestingly, while Bitcoin is being bet against right now, Ethereum’s funding rates are positive, as pointed out by analyst James V. Straten in a post on X. The two metrics have diverged recently | Source: @jimmyvs24 on X From the graph, it’s visible that the funding rates of the top two assets in the sector have gone opposite ways recently. This means that while BTC may be able to build an uptrend off the shorts, ETH could face the opposite effect if the longs end up being liquidated. BTC Price Bitcoin has seen a drawdown of about 1.5% today as the asset’s price has now dropped towards the $26,700 level. BTC is still overall up in the past week | Source: BTCUSD on TradingView Featured image from Yiğit Ali Atasoy on Unsplash.com, charts from TradingView.com, Glassnode.com