The longer funding rates remain in the red, the stronger the squeeze on short positions will be.
bitcoin It was trading at $79,614 in Asian time on Friday, down 1.6% in 24 hours but still up 3.3% on the week, after retreating from a Wednesday high of $81,500, which was the highest level since late January.
Ether fell 2% to $2,278, dogecoin fell 3.8% to $0.1063, XRP fell 1.7% to $1.38 and BNB lost 0.7% to $638. Solana and TRON remained in green territory at $88.14 and $0.3474 respectively. Dogecoin is the only major coin in the red on the seven-day tape.
The withdrawal came as US forces fired on Iranian targets following attacks on US naval destroyers transiting the Strait of Hormuz on Thursday, according to reports.
President Donald Trump described the attack as a “love blow” in an interview with ABC News, said the ceasefire with Iran remains “in effect” and threatened to hit harder if Tehran doesn’t sign a deal soon. Brent crude rose 1.2% to around $101 a barrel on the escalation, although oil is still down more than 6% on the week as the broader narrative of US-Iran detente continues to hold.
Stocks took a similar pause. The MSCI All Country World Index fell 0.3% and Asian shares fell 1.2% from a record close, although the region is still on track for a fifth consecutive week of gains. Wall Street futures rose 0.2% in early trading, suggesting the pullback is profit-taking rather than a structural reversal.
Bitcoin futures funding rates have remained negative for 67 consecutive days, the longest period in 10 years according to K33 Research. Funding fees are periodic payments between traders who hold long and short futures positions, and negative funding means that shorts are paying longs to keep their positions open.
A market where shorts have been paying for two and a half months while the price has risen is the cleanest setup for a short squeeze, where a sudden price move forces those shorts to close positions and accelerates the rally.
FxPro chief market analyst Alex Kuptsikevich said in a note that Bitcoin’s pause this week is not a sign of buyer exhaustion.
“Bitcoin rose to $82,800 on Wednesday, approaching but not surpassing the 200-day moving average of $83,200. From its local highs, the leading cryptocurrency retreated to $81,300 at the time of writing,” he said.
Kuptsikevich added that the daily RSI reached overbought territory above 70, and that the previous three times (August, October, January) were followed by strong selling. “It is logical that market participants take a break to evaluate 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 demand for puts persists, suggesting traders are buying bitcoin but continuing to hedge their downsides.
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For now, trade revolves around two competing pressures. The negative funding tail keeps the short squeeze on the table if bitcoin breaks above $83,200. Iran headlines and overbought RSI keep the door open for another retest of the lower range.
