Is it simply the caretaker's claim that he's not insane, even though it's bluntly obvious that he's mad?
Answers 1Add Yours
The first paragraph told us that the narrator was unstable if not crazy. This really foreshadows the narrator's eventual mental disintegration. The narrator hates the old man's bulging eye. The narrator claims he is not mad yet he wants to kill the old man because his eye bothers him. This certainly foreshadows the narrator as unreliable and hence his eventual mental breakdown.