That's because traders are getting extremely bullish. When interest rates are high or there is no available USDT/BUSD for borrowing, it means traders are borrowing up all the supply to go long.
For rates to come down, longs either need to get shaken out of the market, or more stablecoin supply is needed on the lending side:
https://www.binance.com/en/lending/products?type=flexible
In short, it only means liquidity is drying up. Maybe lenders are finding better places to spend their cash or simply there aren't enough lenders interested to put up cash to provide liquidity. It doesn't automatically mean that market sentiments are suddenly bullish.For rates to come down, longs either need to get shaken out of the market, or more stablecoin supply is needed on the lending side:
https://www.binance.com/en/lending/products?type=flexible
Bitmex lending rates (currently 0.0466% on the XBTUSD perpetual swap) point to the same phenomenon. Combined with historically high open interest, we know there are lots of bullish traders: https://www.bitmex.com/app/contract/XBTUSD
Bitfinex commitment of traders shows the same thing. Longs are up 60% over the past 3 weeks.
Shorts are significantly rising too, but we're specifically talking about USDT and BUSD borrowing liquidity. That pertains to margin longs.
