Bitcoin Smashes $103K as Funding Rates Flip Green After Brutal Liquidations
BTC defies gravity—again—as derivatives markets reset post-carnage. Shorts got wrecked, longs are back in control, and Wall Street’s still trying to explain it to their golf buddies.
Funding rates swing positive: The ’smart money’ indicator flashes bullish after last week’s leverage bloodbath. Traders are paying to stay long—betting this rally has legs.
Liquidation domino effect: $2.8B in positions vaporized before this surge. Classic crypto—burn the weak hands, then moon. Banks hate this one weird trick.
What’s next? The usual suspects: ETF inflows, halving aftershocks, and the Fed’s printer go brrr. Meanwhile, your broker still thinks blockchain is a type of ski lift.
Short Liquidation Clusters Ignite Rally
According to insights shared by CryptoQuant contributor Amr Taha, the recent rally has been driven in part by a sequence of short liquidation events on Binance.
These events not only removed downward pressure from the market but also flipped the derivatives funding market, signaling a possible change in trader sentiment. Taha explained that a large cluster of short positions had accumulated in recent days, creating conditions ripe for a squeeze.
Taha noted that the first key liquidation occurred at the $97,000 level, where a large number of short positions were wiped out, totaling approximately $360 million.
Traders had positioned themselves for a local top, but instead, BTC broke through this zone, triggering a cascade of short covers and forced liquidations. This resulted in a rapid price acceleration as sellers were pushed to close their positions.
Shortly after this surge, the price consolidated below the $101,000 mark, where another dense cluster of short interest had formed. This acted as a magnet for a second liquidation wave.
When BTC breached $101,000, nearly $240 million in shorts were liquidated, contributing to a breakout that pushed the price toward $104,000. Data from liquidation heatmaps highlighted both $97,000 and $101,000 as high-liquidity targets, reinforcing the narrative that these were calculated liquidation sweeps.
Bitcoin Funding Rate Shift Signals Bullish Sentiment
The impact of these events extended beyond spot price movement. Taha pointed to Binance’s funding rate chart, showing that prior to the liquidation events, the funding rate was negative, a reflection of bearish bias among traders who were paying to maintain short positions.
Following the twin liquidation waves, the funding rate flipped to +0.01%, a key signal that demand for long exposure was increasing.
This transition from negative to positive funding is often interpreted as a shift in market structure, from bear-dominated to bull-dominated sentiment. It suggests that many traders now expect further upside, at least in the NEAR term.
Additionally, the rapid adjustment in funding rates highlights the impact that derivative market positioning can have on spot price behavior, especially during periods of thin liquidity or elevated leverage.
Featured image created with DALL-E, Chart from TradingView
