Bitcoin price analysis sees new short squeeze as open interest nears $25B
Bitcoin (BTC) is due a classic “short squeeze” as open interest hits five-week highs, says new analysis.
Key points:
Bitcoin is seeing a combination of rising open interest and negative funding rates.
The result could punish short positions, with funding rates at the most negative since early February.
Large-scale Bitcoin speculators are net long BTC again.
Bitcoin short squeeze likelihood “increasing”
In one of its “Quicktake” blog posts on Saturday, onchain analytics platform CryptoQuant said that Bitcoin was “crowded” with short positions.
“BTC is flowing out of exchanges while funding rates remain strongly negative, creating an increasingly crowded short positioning environment where the potential for a short squeeze is building,” contributor CoinNiel summarized.
After BTC/USD passed $73,000 on Friday, traders appeared eager to trap those entering the market who were betting on continued price upside. Funding rates stayed negative on exchanges, while open interest grew to $24.2 billion — its highest since early March.
“Since March, negative funding has become more frequent, and throughout April it has remained in negative territory without flipping positive,” the post continued.
“This indicates that short positions dominate the market, with shorts paying longs, and such extreme positioning can act as a trigger for a reversal through forced liquidations.”
Bitcoin funding rates. Source: CryptoQuant
CoinNiel said that the combination of rising open interest and negative funding rates “suggests that leveraged short positions have been rapidly accumulating.”
“The slight decrease does not yet indicate a meaningful deleveraging phase,” he acknowledged.
Bitcoin open interest. Source: CryptoQuant
Fellow contributor Gaah agreed, noting that funding rates had hit their deepest negative value since Bitcoin’s dip to multiyear lows at the start of February.
“Caution is needed when establishing positions in current range, since it represents an area of buying demand,” he wrote in a further Quicktake post.
“Bears trapped? Likelihood of a short squeeze is increasing.”
Trader: Bitcoin speculators copying 2023 rebound
Earlier, Cointelegraph reported on short liquidations staying modest despite the BTC price upside.
Related: Bitcoin analysis sees $55K BTC price 'iron bottom' by December 2026
Data from CoinGlass showed that over the 24 hours to the time of writing, cross-crypto liquidations totaled less than $100 million.
Crypto liquidation history (screenshot). Source: CoinGlass
Sentiment among market participants, meanwhile, has gradually begun to favor fresh upside, with targets including $80,000 and higher.
On Saturday, crypto trader Michaël Van de Poppe eyed increasing belief in a BTC price rebound among large-volume speculators.
“Speculators are net long on Bitcoin. Very similar to previous cases where we've seen the same before a big breakout in 2023,” he wrote in a post on X.
Bitcoin investor positioning. Source: Michaël Van de Poppe/X
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
You may also like
While Meta and Alphabet raise concerns in the market over AI cash burn, Microsoft (MSFT.US) counters with over $10 billion in cash flow and leads AI commercialization from story to profit.
Microsoft released its financial results for the first quarter of fiscal year 2027 (ending September 30, 2026) after the U.S. stock market closed on Wednesday Eastern Time. Revenue, earnings per share, and Azure growth all exceeded market expectations.
Wall Street "ponders" Walsh's speech: suggests further rate hikes, but not by much
At a press conference, Walsh, backed by strong economic data (GDP over 3%, double-digit investment growth), refused to characterize current financial conditions as "tight," which the market interpreted as an indication that further rate hikes are still needed, although likely to a limited extent. Despite two internal dissenting votes, a hawkish committee member voted in favor, suggesting that most expect a catch-up hike in December. The futures market has already priced in one rate increase each in December and next March.
Six years of inflation pressure and two dissenting votes: Is the Federal Reserve poised for a December rate hike, with another possible in March next year?
The Federal Reserve holds rates steady; Waller hints at another possible rate hike in December, with additional hikes possible in early 2027. Inflation has failed to meet the target for six years, and futures have already priced in rate hikes for December and March.
Oracle Commits to AI Bet Yielding Returns Earlier Than Expected, Predicts Positive Free Cash Flow in Second Half of Fiscal 2028 and Reduced Capital Expenditures in Fiscal 2029
Hilary Maxson, Chief Financial Officer of Oracle, stated at Investor Day that Oracle expects its free cash flow to turn positive in the second half of fiscal year 2028, and to exceed $30 billion in fiscal year 2029—whereas the market previously expected this indicator to become positive only in fiscal year 2030. She also predicted that capital expenditures will decrease in fiscal year 2029, and set a cap of $20 billion for additional financing before fiscal year 2030. Following the news, Oracle’s stock price surged over 13%.
Crypto prices
More
