Viewpoint: Bitcoin's current rebound is largely due to a significant increase in derivative trading activity.

BlockBeats News, July 3rd, according to a Cointelegraph analysis article, the price of Bitcoin recently surged from $105,200 to $109,500, mainly due to a significant increase in derivative trading activity, indicating that the market momentum is recovering. The open interest (OI) on major futures exchanges surged by 10%, equivalent to around $3.2 billion, indicating a large influx of funds into the market. This growth was primarily driven by long positions, indicating confidence in further Bitcoin price appreciation.

Despite the price and open interest (OI) rise, the funding rate in the perpetual contract market remains stable. This suggests a balance in sentiment between long and short traders, and more importantly, the current uptrend is not driven by excessive leverage. From a bullish perspective, the stable funding rate during the price increase implies that the upward trend may be more sustainable. Alongside this trend, a significant short squeeze has occurred in the market, with over $196 million worth of short positions liquidated in the past 12 hours. This strong liquidation event is likely to accelerate Bitcoin's breakthrough of key resistance levels.

Furthermore, the Bitcoin Coinbase Premium Index has remained high throughout the trend, further validating the strength of buyers. This index tracks the price difference between Coinbase and other major exchanges, indicating that buying pressure from U.S. institutional and retail investors continues, further reinforcing the bullish outlook.