Viewpoint: Bitcoin Funding Rate Drops to -6%, Potential Short Squeeze Conditions Form

Odaily News Bitcoin briefly fell to $63,000 following attacks by the US and Israel on Iran, with the perpetual contract funding rate dropping to -6%, marking the second-lowest level in nearly three months. The last time the funding rate reached this level was on February 6th, when Bitcoin bottomed out around $60,000.

CoinGlass data shows that over the past 24 hours, coin-denominated open interest has risen from 668,000 BTC to 687,000 BTC, with over $500 million in cryptocurrency positions liquidated, including more than $420 million in long positions.

A deeply negative funding rate typically indicates a concentration of short positions, with traders willing to pay a premium to maintain bearish bets. An increase in BTC-denominated open interest coupled with a negative funding rate suggests heightened market participation and more traders betting on a downturn. Bitcoin is currently attempting to reclaim the $64,000 level.