The longer funding rates stay in the red, the louder the calls for a short squeeze get.
Bitcoin It traded at $79,614 during the Asian session on Friday, down 1.6% in 24 hours, but still up 3.3% for the week, retreating from Wednesday’s high of $81,500, its highest level since late January.
Ethereum fell 2% to $2,278, Dogecoin fell 3.8% to $0.1063, XRP fell 1.7% to $1.38, and BNB fell 0.7% to $638. The prices of Solana and TRON are $88.14 and $0.3474 respectively. Dogecoin is the only major currency to post losses in the seven-day trend.
U.S. forces reportedly opened fire on Iranian targets Thursday after a U.S. Navy destroyer was attacked as it passed through the Strait of Hormuz.
President Donald Trump described the attack as a “love tap” in an interview with ABC News, said the ceasefire with Iran was still “in effect” and threatened tougher strikes if Tehran did not sign a deal soon. As the situation escalated, Brent crude oil prices rose 1.2% to around US$101 per barrel. However, as the background of easing tensions between the United States and Iran continued, oil prices still fell by more than 6% this week.
The stock market experienced a similar pause. The MSCI All Country World Index fell 0.3%, with Asian stocks down 1.2% from a record close, but the region was still on track for a fifth straight weekly gain. Futures on Wall Street were up 0.2% in early trade, suggesting the pullback was profit-taking rather than a structural reversal.
According to K33 Research, Bitcoin futures funding rates have now remained negative for 67 consecutive days, the longest stretch in 10 years. Funding rates are periodic payments between traders holding long and short futures positions, and negative funding means shorts pay longs to keep their positions open.
A market where shorts have been paying for two and a half months while prices keep moving higher is the cleanest short squeeze setup, with a sudden price move forcing these shorts to cover their positions and accelerating the rally.
FxPro chief market analyst Alex Kuptsikevich said in a report that Bitcoin’s pause this week is not a sign of buyer exhaustion.
“Bitcoin rose to $82,800 on Wednesday, approaching but not breaking above the 200-day moving average of $83,200. At the time of writing, the leading cryptocurrency was back down from local highs to $81,300,” he said.
Kuptsikevich added that the daily RSI hit overbought territory above 70, and the three previous times this happened (August, October, January) were followed by sharp selloffs. “It is logical that market participants are taking a breather to assess the situation and gather strength.”
The options market is more cautious. QCP Capital said in a Telegram broadcast that monthly implied volatility remains around 41% and that demand for put options persists, indicating that traders are buying Bitcoin but continuing to hedge its downside risk.
Elsewhere, research firm XWIN Japan marked $93,000 as a medium-term target driven by a narrowing gap in CME futures, although the firm warned that the move may not be linear and could fall first.
Currently, trade faces two competing pressures. If Bitcoin breaks above $83,200, negative funding extremes will lead to a short squeeze. Iran headlines and an overbought RSI have opened the door for another test of the lower range.
