Crypto derivatives markets are showing clear signs of renewed conviction as traders position for a potential year end breakout in Bitcoin.

According to Glassnode, perpetual futures open interest has climbed sharply, rising from around 304,000 BTC to nearly 310,000 BTC as Bitcoin briefly tested the $90,000 level earlier this week. This increase in open interest reflects a growing buildup of leveraged positions, suggesting that traders are preparing for a decisive move as the year draws to a close.

Alongside the rise in open interest, funding rates have also accelerated. Glassnode data shows funding increasing from roughly 0.04 percent to 0.09 percent, a notable shift that points to stronger demand for long exposure. When funding rates rise, it generally indicates that perpetual futures are trading at a premium to spot prices, meaning traders are willing to pay extra to maintain bullish positions.

Glassnode described this combination as a clear signal of renewed leveraged long positioning, with perpetual traders increasingly confident in the possibility of a year end move. Perpetual contracts, unlike traditional futures, do not expire and rely on funding payments between longs and shorts to keep prices aligned with the spot market. As a result, funding rates often act as a real time gauge of market sentiment.

Rising funding typically reflects optimism, but it also introduces an element of risk. Elevated rates can indicate crowded long positioning, which may leave the market vulnerable to sharp pullbacks if sentiment shifts or price momentum stalls.

That tension is already visible. After briefly approaching $90,000, Bitcoin struggled to hold above the level and retreated toward the $88,200 area at the time of writing. While the broader positioning suggests traders are leaning bullish into year end, the market now faces a familiar balance between momentum driven upside and the risk of overextended leverage.

As liquidity builds and derivatives activity intensifies, Bitcoin’s next move is likely to be decisive. Whether this surge in open interest fuels a sustained rally or sets the stage for short term volatility will depend on how spot demand responds in the days ahead.