Bitcoin Risks Drop Below $90K Amid Long Squeeze Fears
Key Takeaways
- Bitcoin is currently trading around $94,000 USD.
- The funding rate is positive – long positions are dominant.
- Open interest increased by $1 billion USD within 24 hours.
- Decreasing buying momentum despite rising long positions increases the risk of a long squeeze.
- A long squeeze could push the BTC price below $90,000 USD.
- Short-term investors are showing initial signs of stabilization.
What Does a Positive Funding Rate Mean?
The funding rate is a mechanism used in futures markets to ensure that the price of a perpetual futures contract aligns with the spot price (current market price). A positive funding rate means that traders holding long positions (betting on rising prices) pay a fee to those with short positions. This indicates that the majority are betting on price increases.
Currently, Bitcoin’s funding rate is positive again – a sign of strong confidence in continued price growth. However, this can also become a problem.
Rising Long Positions Amid Weak Price Movement
In recent days, open interest in Bitcoin futures has increased from $31 billion to $32 billion USD. This means many traders are opening new positions – primarily long ones. At the same time, the price is stagnating around $94,000 USD. Price momentum is weakening.
Another warning sign: the so-called Spot Cumulative Volume Delta (CVD) is in negative territory. This value indicates whether buyers or sellers are dominating. A negative CVD alongside rising open interest suggests that buyers are losing strength – despite growing demand for long positions.
What Is a Long Squeeze?
A long squeeze occurs when many traders bet on rising prices, but the market doesn’t follow through. If the price suddenly drops, long positions get liquidated. This increases downward pressure. Many traders sell simultaneously to limit losses – causing the price to fall further.
Current market conditions suggest an increased risk of such a squeeze. It becomes particularly critical if the price falls below $90,000 USD – where many long positions are located.
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Is There Hope for Stabilization?
Despite the warning signs, there are also positive developments. The Realized Profit/Loss Ratio (the ratio of realized gains to losses) for short-term Bitcoin holders has risen to +1.2%. This means these investors are currently in profit.
Historically, this is a good sign. When short-term holders are in the green, selling pressure tends to decrease. This can stabilize the market and prevent further downward movement.
What Matters Now
For Bitcoin to avoid a long squeeze, the price must rise above $95,000 USD in the short term. An increase to $96,000 USD would strengthen confidence and reduce the risk of a sudden price drop.
Traders should keep an eye on the funding rate, open interest, and spot CVD. These metrics provide early indicators of potential market movements.
Our Assessment
The Bitcoin market is currently showing an imbalance: many traders are betting on rising prices, but price action is not confirming their expectations. This increases the risk of a long squeeze. However, short-term investors who are in profit could help stabilize the market.
If you’re already invested or considering it: monitor the price closely. A drop below $90,000 USD could trigger a cascade of sell-offs. At the same time, a stable rise above $95,000 USD offers a chance for the uptrend to continue.
Stay alert and keep yourself informed with the latest market data.
Sources
- Alphractal
- CryptoQuant
- Checkonchain
| Symbol | BTC |
| Coin type | Alt Coin |
| Transaction Speed | Slow |
| Pros |
|
| Cons |
|
| Further practical applications | |
| Price | $94,607.00 |
| 24h % | 0.90 % |
| 7d % | 7.34 % |
| 30d % | 13.58 % |
| 60d % | 16.58 % |
| 1y % | 50.92 % |
| Market Cap | $1,878,354,154,257.00 |
| Max. Supply | 21,000,000.00 |
| Official Links | Website | Whitepaper | Source Code |
| Socials | Reddit | X | Message Board |
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