Bitcoin’s derivatives market has now posted a 30-day average funding rate below zero for 46 straight days. In its latest report, K33 said the stretch matches the pattern seen near the end of the 2022 bear market, a sign that short positioning has become unusually crowded and that squeeze risk is rising.
The report said defensive positioning has become common in the BTC market, yet funding has remained negative while open interest keeps climbing and spot price has started to move higher. That combination points to aggressive short exposure staying in place even as price firms. If those positions are forced to close, the resulting buy pressure could help break Bitcoin out of its 68-day consolidation range.
A rare run of negative funding
K33 head of research Vetle Lunde said only two periods in the historical record were longer than the current streak for the 30-day average funding rate. One ran from March to May 2020 for 63 days. The other lasted from June to August 2021 for 49 days. Those periods lined up with the post-crash bottom during the pandemic shock and the consolidation phase after China’s full crackdown on Bitcoin mining.
By K33’s reading, extended negative funding is rare. It shows that traders on the perpetual futures side are still willing to pay to hold bearish positions, and that kind of crowded trade can unwind fast when price turns the other way. The longer the imbalance lasts, the more sensitive the market becomes to forced buying.
Three signals are lining up at once
Lunde said the current setup includes three conditions at the same time: nominal open interest is trending higher, Bitcoin’s spot price is rising, and average funding across daily, 7-day, and 30-day windows remains negative. He said crypto-native positioning fits that pattern in full, which is why K33 has kept a bullish view on BTC over the past month.
He also said compressed funding and the unusual persistence of negative readings are lifting the odds that Bitcoin can break out of its long trading range and print a higher high. The report did not attach a timetable to that move, but derivatives positioning is now the main focus for traders watching whether a squeeze actually starts.
Bitcoin remains 41% below its record high
As cited in the report, Bitcoin is still down about 41% from its all-time high of roughly $126,000, set on October 6, 2025. K33’s argument is not based on price action alone. It rests on the interaction between funding, open interest, and spot market strength, with the growing pile of short exposure emerging as the key variable in the next major move.