Today, on 26 April, Bitcoin and altcoins received a huge boost in an unexpected turn of events. Bitcoin alone received a 12% boost within a few hours, moving from about $47,000 to more than $53,000. Altcoins generally received a 15% growth in what has left many short-sellers scampering to liquidate $150M worth of short orders.
The reason for the price spike in this short period is that the bulls have kept their pressure on the short-sellers, causing them to retract and re-buy their orders.
As a result of rebuying the short-sell orders, the buyer orders flocked the market, and caused the funding rate to rise, although Bitcoin has not yet exceeded 0.01 funding rate, despite the massive ongoing rally.
Funding rates refers to the difference in spot price and perpetual contract market price paid to traders for either short or long trades. When this rate goes above 0% across exchanges, sellers receive a payment that is a portion of their position from buyers after every eight hours.
As Bitcoin is yet to exceed the 0% funding rate, it indicates that there are still more short orders than long, which is an indication of the possibility of even more price rise.
Also, the fact that bulls are in control after a major short contract liquidation shows that Bitcoin may be heading for a record high, especially if the momentum continues into the US open at $55, 500.