Bitcoin Faces Potential Short Squeeze as Funding Rates Hit -6%

Following a dip to $63,000 after attacks by the United States and Israel on Iran, Bitcoin is attempting to regain the $64,000 mark amid a potential short squeeze. Concurrently, perpetual futures funding rates have fallen to -6%, marking the second-lowest level in three months, according to CoinGlass data.

When funding rates are positive, traders holding long positions pay fees to those holding short positions. Conversely, negative funding rates indicate that short-sellers are paying long-sellers. Deeply negative rates typically signal aggressive short positioning and bearish sentiment, as traders are willing to pay a premium to maintain their bearish bets.

In parallel, open interest denominated in BTC has seen an increase from 668,000 BTC to 687,000 BTC over the past 24 hours.

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