Bitcoin at $94K – Predicting if long squeeze is next after Funding Rate turns positive

• Bitcoin’s long positions surge above $90k, triggering market optimism
• Concerns arise over potential long squeeze as price momentum weakens

Bitcoin experienced a significant rally, surpassing $95k in the past week. This surge sparked increased investor interest and a growing appetite for long positions, with expectations of further gains on the horizon.

Within the last 24 hours, Bitcoin’s Funding Rate turned positive, indicating a dominance of long positions above the $90k mark.

Source: Alphractal

Despite the optimistic outlook, the surge in long positions could pose challenges as the price momentum shows signs of weakening.

Notably, Bitcoin’s Open Interest surged by $1 billion in a day, reaching $32 billion from $31 billion. This increase indicates a growing number of traders entering the market to open long positions.

Although Open Interest and funding rates are on the rise, Bitcoin’s price has remained relatively stable around the $94k range for the past two days.

Source: CryptoQuant

Furthermore, Bitcoin’s spot cumulative volume delta remains in negative territory, currently at -1094. This indicates weakening buying pressure amidst the rising Open Interest.

As market conditions suggest a potential long squeeze, concerns are raised regarding a market-wide anxiety. Traders are split between optimism for higher prices and fear of a sharp downturn.

If a long squeeze materializes, Bitcoin’s price could see a significant drop below $90k, where long positions are concentrated.

Is Bitcoin headed for a long squeeze?

The increasing funding rate coupled with weakening price momentum raises alarms for a possible long squeeze, pushing the price below $90k.

However, there are some positive indicators from short-term holders, with the realized profit/loss ratio climbing to +1.2%. Historically, a positive flip in this ratio has signaled a sustained recovery in the market.

Source: CryptoQuant

Profitable short-term holders can inject positivity into the market and potentially stabilize the price, reducing selling pressure and mitigating downside risks.

To avert a long squeeze, Bitcoin must reclaim $95k and aim for $96k to maintain market stability.