The futures market and traders making high leverage bets, are part of the reason why Bitcoin has continued to remain volatile. Also, the circulating supply is more limited than ever, while institutional investors have continued to accumulate coins.
The spot market overheating and overreacting is cause by over leveraging in the derivative market.
The average perpetual funding rate rose as high as 0.09% this month, dropping back down to a more reasonable 0.016% following mass liquidations. Some exchanges such as FTX and Kraken even saw their funding rates turn negative.
Historically, a cool down in funding rates lead to short-term increases. More likely than not, Bitcoin, alongside the broader crypto market, will recover in due time.