Bitcoin bears face $2.6B trap as BTC funding rate drops: Is a short squeeze brewing?
Bitcoin fell to about $61,100, triggering roughly $335 million in leveraged long liquidations. Despite the drop, bearish positioning built up heavily in the $63,000–$66,000 range, creating conditions for a potential short squeeze worth up to $2.6 billion if BTC rebounds toward $66,000. A further decline to $57,000 would expose about $1.2 billion in additional liquidations. Spot Bitcoin ETFs remain a drag: after a record 13-day outflow streak, Thursday’s small $3 million inflow may be only temporary relief following about $5.1 billion in outflows. Perpetual futures funding has turned negative, showing stronger bear conviction, while recent deleveraging has reduced downside risk. Bitcoin has also lagged the Nasdaq 100 as weakness in AI-related tech stocks, including Broadcom, Micron, and Arm, may be pulling liquidity from risk assets. Some expect capital to rotate back into Bitcoin once AI enthusiasm cools, especially if ETF inflows recover and concern over Strategy’s recent BTC sale fades.
