• Trump signaled that the Iran conflict may end soon, dropping the U.S. Dollar Index, but pushed Bitcoin to $71,000.
• Derivatives data show crowded Bitcoin short positions. This could cause a short squeeze.
• Oil price declined, as traders shifted to Altcoins and equities reflecting risk appetite across global markets.

Bitcoin is trading at $70,581 after U.S. President Donald Trump said tensions related to the Iran war could ease soon. Despite BTC being up 4.41% in the last 24 hours, extending weekly gains to 5.64%, it needs to reclaim the $98,000 level to confirm a full trend reversal.

Source: CoinGecko

Derivatives Data Shows Fresh Capital Entering Crypto

Derivatives markets indicate rising activity across major cryptocurrencies. Open interest in Bitcoin and Ether futures increased by more than 5%.

The increase in open interest outpaced gains in spot prices. This pattern usually signals fresh capital entering the derivatives market during rallies.

Data also showed activity in alternative tokens. Open interest in HYPE futures rose 14% to reach about $1.41 billion.

The number of outstanding HYPE contracts climbed above 40 million. Even so, the level remains close to recent lows.

In contrast, open interest for tether gold futures declined below 110,000 XAUT. The move suggests capital rotation away from gold-linked tokens.

Funding rates across most perpetual futures contracts remain slightly positive. This signals a narrow dominance of bullish bets across derivatives markets.

However, a few tokens, such as ZEC and SUI, recorded negative funding rates. Negative funding typically means short traders are paying long positions.

Options markets show traders preparing for larger price swings. On Deribit, protective puts remain more expensive than bullish calls.

Market makers expect volatility to increase if Bitcoin moves above the $75,000 level. Block trades also showed demand for straddles and call spreads.

Crowded Short Positions Signal Potential Market Volatility

Another derivatives signal indicates that bearish positioning has intensified recently. The Bitcoin funding rate 30-day percentile has dropped to around 6%.

This reading means that 94% of the past month recorded higher funding rates. Such levels show that the perpetual futures market currently leans heavily bearish.

Funding rates balance long and short positions. When funding turns negative, traders betting against Bitcoin pay those holding long positions.

Over the past month, negative funding appeared on 25 of the last 30 days. Some sessions recorded readings below –0.01%.

Extreme levels appeared earlier in February. One reading reached about –0.021% on February 6.

Crowded trades often create unstable market conditions. If prices move higher, short traders may rush to close positions.

Such reactions can trigger short squeezes. Rising prices force liquidations, which then accelerate upward momentum.

A widely shared social media post reflected strong conviction among some investors. The post argued that negative sentiment and sidelined capital could support future crypto rallies. Even so, derivatives metrics suggest positioning risk remains elevated. Price stability or gradual recovery could quickly unwind heavy short exposure.