The cost to hold short Bitcoin positions has risen, and some market participants think that this could lead to a short squeeze. Negative funding rates make short positions expensive to hold, and there are many people in the market who have shorted Bitcoin. With few long speculative positions, there is a chance that any upward movement could cause Bitcoin prices to see a near-term spike. The crypto markets have been choppy over the last few months, with many of the altcoins falling, especially in the DeFi space. Bitcoin has been relatively stable by comparison, which suggests more liquidity in the Bitcoin market when compared to the altcoins.
Added liquidity may be helping Bitcoin to lose some of its trademark volatility. While DeFi tokens have been slaughtered over the past month, Bitcoin prices have been far more stable. This points to more investors entering the marketplace, and softening quick movements in the major tokens via more market depth. While Bitcoin prices did plunge earlier this year, most major assets did so at the same time. Unlike equity markets in the West, there is no official support for Bitcoin prices, which suggests that there is organic support for Bitcoin, and perhaps some of the other major tokens as well.