Viewpoint: The recent rebound of Bitcoin is attributed to a significant rise in derivatives trading activity.

On July 3rd, according to an analysis article by Cointelegraph, the price of Bitcoin recently surged from $105,200 to $109,500, primarily due to a significant increase in derivatives trading activity, indicating that market momentum is recovering. The open interest (OI) at major futures exchanges skyrocketed by 10%, amounting to approximately $3.2 billion, suggesting a large influx of funds into the market. This increase is mainly driven by long positions, reflecting the market's confidence in further Bitcoin price rises. Despite the increase in price and open interest (OI), the financing rates in the perpetual futures market remain stable. This indicates a balanced sentiment among long and short traders, and more importantly, this surge is not driven by excessive leverage. From a bullish perspective, the stable financing rates during the price rise suggest that the upward trend may be more sustainable. Accompanying this trend, a noticeable short squeeze occurred, with over $196 million in short positions being closed within the past 12 hours. This forceful closing wave likely accelerated Bitcoin's breakthrough of key resistance levels. Additionally, the Bitcoin CEX premium index remained high throughout the trend, further validating the strength of buyers. This indicator tracks the price differences between CEX and other major exchanges, indicating that there is ongoing spot buying pressure from both U.S. institutional investors and retail investors, which further strengthens the bullish outlook.