Bitcoin is hovering near the $64,000 level as derivatives data signal the potential for a short squeeze, after prices briefly dropped toward $63,000 following U.S. and Israeli strikes on Iran.
Figures from CoinGlass show perpetual futures funding rates plunging to around -6%, the second-lowest reading in the past three months. The last time funding was similarly negative was on Feb. 6, when bitcoin formed a local bottom near $60,000 before rebounding.
Funding rates are periodic payments exchanged between traders in perpetual futures markets. When rates are positive, long-position holders pay those on the short side. When rates turn negative, short sellers pay longs. Sharp negative funding typically reflects heavy bearish positioning, with traders willing to absorb costs to maintain downside bets.
At the same time, coin-margined open interest increased from 668,000 BTC to 687,000 BTC over the past 24 hours. Measuring open interest in BTC terms removes the impact of price swings, offering a clearer view of positioning. The rise in open interest alongside deeply negative funding suggests growing market participation, with exposure skewed toward further declines.
Liquidations have also mounted. More than $500 million in crypto positions were wiped out in the past day, according to CoinGlass, with long positions accounting for over $420 million of that total. The imbalance highlights the extent of forced selling as prices moved lower.
Taken together, plunging funding rates, expanding open interest and sizable long liquidations point to crowded bearish trades and heightened derivatives activity — conditions that can amplify volatility and potentially fuel a squeeze higher if sentiment shifts.
