📉 A Historic Shift in Funding Rates
In a rare market development, funding rates on Ethereum and Bitcoin have turned negative, reaching levels unseen since late June 2025.
Ethereum funding rate dropped to -0.006%
Bitcoin funding rate slid to -0.003%
This inversion suggests that short sellers are now paying to hold positions—an indication of intensified bearish sentiment across derivatives platforms.
💥 The $180 million Ethereum long liquidation event on Binance:
* The sudden plunge in Ethereum’s price below $3600 triggered a major forced liquidation event on Binance, wiping out over $180 million in long positions.
* The accompanying chart highlights aggressive long liquidations as price breached critical support levels.
🔍What Is a Long Squeeze?
A long squeeze occurs when overleveraged buyers are forced to exit positions due to margin calls or liquidations.
This results in:
* Aggressive selling to meet collateral requirements.
* Downward spiral as liquidations cascade.
* Negative funding rates, as shorts (sellers) dominate the market.
Conclusion: Why Prices Could Recover
The recent liquidation event and negative funding rates have reset market sentiment, clearing out overleveraged longs.
With Ethereum and Bitcoin funding rates now deeply negative and sentiment shifting excessively bearish, the probability of a short squeeze is rising.
If prices begin to stabilize or show signs of strength, overleveraged short positions could come under pressure—fueling a rebound.
Written by Amr Taha
