Short squeeze close?
Bitcoin (BTC) price has established a new weekly low at $65,500 on Thursday, continuing its downward trend in the past four days. Initial data indicates that traders are in a very low position.
Other indicators suggest the move may not be straightforward, analysts said, with the position likely to force sellers to close in on higher activity.
Main Receptors:
Bitcoin's seven-day average funding volume has turned negative for the first time since March 2023 and November 2022.
Bitcoin liquidity and fixed coin flow data indicate renewed capital flows, reducing the likelihood of a sustained squeeze.
Bitcoin funding remains in the red as short positions arise
Bitcoin's daily funding rate has been in deep red territory since early February, marking its most negative period since May 2023. The seven-day simple moving average (SMA) turned negative for the first time in over a year.
The currency is a periodic payment between traders in the futures markets. When it is negative, short sellers pay long traders, which means that the strike positions are crowded and vice versa.
Crypto analyst Leo Ruga suggests that the current “red funding volume for days” may indicate that a bear or short trade is getting crowded. Ruga added:
“This is the type of negative funding that is mostly seen at low levels. Not because shorts are wrong, but because extended negative funding often dissipates selling pressure.”
At the same time, market analyst Pelin I emphasized that the financial ratio recently fell to -0.02 last Friday. No, he added, could set the stage for a short-term squeeze, especially if it holds $58,000 in domestic support when prices coincide with negative funding.
Related: ‘Bear Acceleration': Bitcoin Should Close Week at $68.3K to Avoid Analyst
The last time Bitcoin's daily funding range was 10 to 20 days after the crash level was in May 2021 and January 2022. BTC corrected for two months before reaching new highs in May 2021. In January 2022, the negative stretch preceded a broader bear cycle. Therefore, extended negative funding has not resulted in rapid reversals in the past.
Onchain data supports careful visualization. According to Bitcoin Research analyst Axel Adler Jr., the SSR oscillator, which measures Bitcoin's strength relative to stablecoins, has remained mostly in negative territory since August 2025.
A brief move into positive territory in mid-January (+0.057) coincided with a rally above $95,000, but the oscillator dropped to -0.15 when the price returned to $67,000.
Stablecoin flows tell a similar story. The 30-day volatility of USDt (USDT) market value turned positive in early January (+$1.4 billion), but has since turned to -$2.87 billion, indicating a period of capital outflows.
Until liquidity trends and SSR swings become sustainably positive, Adler Jr. says the BTC market will remain in a “risk-off” phase.
Related: Binance Completes $1B Bitcoin Swap for SAFU Emergency Fund
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