Why rising perpetual funding rates signal growing bullish leverage as bitcoin crosses $86,500

Bitcoin derivatives activity is picking up ahead of Friday’s U.S. jobs report, with traders adding positions as the price climbs above $86,000.

Open interest has risen to approximately 653,000 $BTC ($56.2 billion) from 626,000 $BTC on Sept. 30, according to CoinGlass data, an increase of 27,000 $BTC ($2.3 billion), or roughly 4.3%. Open interest measures the total value of outstanding futures and perpetual contracts that have yet to be closed or settled. Rising open interest indicates that traders are adding exposure, although it does not reveal whether they are betting on prices rising or falling.

Bitcoin has climbed from around $83,500 to $86,500 over the same period. A price increase coinciding with rising open interest suggests new positions are helping support the rally.

Meanwhile, the perpetual funding rate has risen from around 3% to 10% in the same time frame. Funding is a periodic payment exchanged between traders holding long and short positions, designed to keep perpetual futures prices close to the spot price. When funding is positive, traders betting on higher prices pay those betting on lower prices.

The increase suggests stronger demand for bullish exposure, with traders willing to pay more to maintain their positions ahead of the jobs report.

However, open interest of approximately 625,000 $BTC at the end of September was near its lowest level in 12 months. Although speculative activity has begun to recover, the recent increase comes from a low base. Higher funding points to a more bullish market, but it also raises the cost of holding long positions and can leave leveraged traders more vulnerable to a sudden price reversal.

Crypto-linked equities are also moving higher in Friday’s premarket trading asa result. Strategy MSTR$164,78·Marché fermé, the largest corporate holder of bitcoin, and Strive ASST$31,07·Marché fermé are each up around 3%, while Coinbase COIN$194,07·Marché fermé and Robinhood HOOD$112,98·Marché fermé have gained approximately 2%.