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The price of bitcoin rose 80% the last time BTC funding rates turned negative.
A negative funding rate means that short position holders are paying long traders to keep their positions open, which is an indication of bearish sentiment in the market.
However, a negative funding rate during an overall bullish price trend often leads to an excess of short trades, making them vulnerable to a short position squeeze.
In the case of Bitcoin, similar changes in the funding rate in September 2024 and July 2023 preceded gains of 80% and 150%, respectively.
The recent recovery of BTC funding into positive territory reflects those previous setups, suggesting that the bearish adjustment may have come to an end and that the market is preparing for another upward move.
The level of USD 111,320 in the BTC/USDT pair shows the largest concentration of anticipated liquidations in the last three months, with approximately USD 520.31 million in leveraged positions at risk, according to data from CoinGlass.
Meanwhile, the technical data for bitcoin shows a breakout above the upper trend line of a bullish flag pattern on the daily chart.
