The longer funding rates remain red, the stronger the short-term pressure becomes.
Bitcoin was trading at $79,614 on Friday, down 1.6% over 24 hours but still up 3.3% over the week, having retreated from Wednesday’s high of $81,500, the highest since late January.
Ether fell 2% to $2,278, dogecoin slipped 3.8% to $0.1063, XRP fell 1.7% to $1.38, and BNB lost 0.7% to $638. Solana and TRON were holding in green territory at $88.14 and $0.3474 respectively. Dogecoin is the only major coin in red on the seven-day band.
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 called the strike a “love blow” in an interview with ABC News, said the ceasefire with Iran remained “in effect” and threatened to strike harder if Tehran did not sign a deal soon. Brent crude climbed 1.2% to around $101 a barrel on the escalation, although oil is still down more than 6% for the week as the broader narrative of de-escalation between the United States and Iran continues to hold.
Stocks saw a similar pause. The MSCI All Country World Index slipped 0.3% and Asian shares fell 1.2% from a record close, although the region is still on track for a fifth straight week of gains. Wall Street futures were up 0.2% in early trading, suggesting the pullback is profit-taking rather than a structural reversal.
Bitcoin futures funding rates have now remained negative for 67 consecutive days, the longest period in 10 years according to K33 Research. Funding rates are periodic payments between traders holding long and short futures positions, with negative funding meaning shorts pay long positions to keep their positions open.
A market where shorts have been paying for two and a half months while prices have increased is the cleanest setup for a short squeeze, where a sudden price movement forces these shorts to close their positions and accelerates the rally.
Alex Kuptsikevich, chief market analyst at FxPro, said in a note that Bitcoin’s pause this week was not a sign of buyer exhaustion.
“Bitcoin hit $82,800 on Wednesday, approaching but not surpassing the 200-day moving average at $83,200. From its local highs, the leading cryptocurrency has retreated to $81,300 at the time of writing,” he said.
Kuptsikevich added that the daily RSI reached overbought territory above 70 and the previous three times (August, October, January) were followed by heavy selling. “It makes sense for market participants to take a break to assess the situation and regain strength.”
The options market is more cautious. QCP Capital said in a Telegram broadcast that monthly implied volatility remains around 41% and demand for put options persists, suggesting traders are buying Bitcoin but continuing to hedge their downside risks.
Elsewhere, research firm XWIN Japan flagged $93,000 as a medium-term target driven by the narrowing CME futures gap, although the firm warned the move may not be linear and could see a decline first.
For now, trade revolves around two competing pressures. The extreme negative funding keeps the short squeeze on the table if bitcoin rises above $83,200. Iranian headlines and the overbought RSI leave the door open for a retest of the lower range.
