Key Points:
Bitcoin funding rates briefly turned negative at the end of June, historically a signal of an impending price increase.
A large concentration of short liquidations around the $111,320 mark could trigger a short squeeze.
New research shows that BTC has broken out of a bullish flag pattern, with a target price of $117,500.
The perpetual funding rate for Bitcoin (BTC) futures fell into negative territory at the end of June, during which the BTC spot price rose from below $100,000 to around $108,000.
History may suggest that this divergence indicates a significant price boom for Bitcoin is on the horizon.
A negative funding rate means that short position holders are paying fees to long traders to keep their positions open, which is a sign of bearish market sentiment.
However, negative funding rates that occur during an overall price uptrend often lead to overcrowded short positions, making them susceptible to a short squeeze.
For Bitcoin, similar funding rate shifts in September 2024 and July 2023 resulted in price increases of 80% and 150%, respectively.
The recent recovery of the BTC funding rate back into positive territory reflects those previous setups, indicating that the bearish reset may have ended and the market is once again poised for a new rally.
According to CoinGlass data, the $111,320 level for the BTC/USDT trading pair shows the highest concentration of predicted liquidations over the past three months, with an estimated $520.31 million in leveraged positions at risk.
Reaching this liquidity could trigger a short squeeze, with forced buybacks from short traders driving prices higher.
Meanwhile, Bitcoin's technical indicators show a breakout above the uptrend line of a bullish flag pattern on the daily chart.
Based on the previous flagpole, the measured move of this pattern points to a potential target near $117,500, closely aligning with 10x Research's head of research Markus Thielen's prediction of $116,000 by the end of July.
Related: Ethereum Community Fund Established, Aiming to Drive ETH Price to $10,000
This article does not contain investment advice or recommendations. Every investment and trading action involves risks, and readers should conduct their own research when making decisions.
Original article: “Bitcoin (BTC) Funding Rate Turns Negative, Historical Data Indicates Price Increase”
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