Negative funding rates persist for Bitcoin at $78K, fueling short squeeze predictions
Despite BTC's gradual upward movement, funding rates remain in negative territory — an unusual situation that analysts believe will trigger a short squeeze.
On Tuesday, Bitcoin (BTC) attempted to reach price levels not seen in ten weeks as traders positioned themselves for an anticipated short squeeze event.
Key points:
- Market experts suggest Bitcoin is positioned for another short squeeze as funding rates remain in negative territory while prices continue their upward grind — a distinctive pattern.
- Analysts are eyeing $85,000 as a near-term price objective within the next few weeks.
- Bulls face a critical hurdle at the 21-week trend line that has capped Bitcoin's price action since October 2025.
Bitcoin short squeeze setup complete as "cannon is loaded"
According to TradingView data, BTC/USD was nearing the $77,000 mark for the first time during the current weekly candle period.
Following a minor pullback coinciding with Wall Street's opening bell, the price action remained compressed beneath a significant resistance zone.
Conflicting reports regarding the US-Iran conflict persisted throughout the trading session, with Iranian officials refuting claims that diplomatic delegations had reached Pakistan for fresh negotiations with US representatives. Earlier reporting from Cointelegraph highlighted how markets exhibited only a subdued response to the most recent blockade of the Strait of Hormuz oil shipping lane.
Within the Bitcoin trading community, sentiment was gradually shifting toward measured optimism.
In an X post, crypto trader Michaël van de Poppe observed: "A period of consolidation, but clearly upwards pattern."
"This means that there's likely more upside to come for Bitcoin towards the $85,000 area."
Van de Poppe projected a "two to three weeks" timeline for reaching that price target, echoing his previous observations regarding Bitcoin's correlation with the Nasdaq.
Meanwhile, other market observers concentrated on the persistent negative funding rates across exchanges, which notably continued even as prices climbed higher.
Trader Osemka highlighted this anomaly on X, accompanied by historical charts depicting previous negative funding episodes: "We've never actually gotten one when the chart was grinding up. NEVER. It only occurred during the local BOTTOMS."
According to Osemka's analysis, "something is brewing beneath" current market conditions, particularly as BTC/USD positioned itself to recapture previously lost support levels.
In response to this observation, Decode, a crypto market intelligence platform, concurred with the assessment and identified conditions ripe for another short squeeze event.
The platform shared with its X audience: "What this tells you is that the market is heavily short and bearish, and Bitcoin is setting up for a short squeeze. The cannon is loaded, bulls just need to light the fuse…"
Latest CME gap narrows as BTC confronts critical resistance
Bulls currently face several critical resistance levels positioned directly above current spot prices.
Among these barriers are the 21-week exponential moving average (EMA), the true market mean, and the average entry price for US spot Bitcoin exchange-traded funds (ETFs) investors.
Market analyst Daan Crypto Trades noted that price action had successfully filled a substantial portion of the most recent weekend "gap" in CME Group's Bitcoin futures market.
He remarked: "$BTC Closed a big part of the gap from this weekend but still not everything. Market still just following the headlines and no $STRC raises for now. So we will just patiently wait and see."
