Major cryptocurrencies, including Bitcoin (BTC), Ethereum (ETH), XRP, and Solana (SOL), are under pressure following what analysts describe as a “long squeeze” — a mass unwinding of overly optimistic bullish positions in the crypto futures market.
Futures Data Confirms the Squeeze
According to Velo data, open interest — the total number of unsettled futures contracts — has fallen sharply across key tokens:
Meanwhile, funding rates remain positive, meaning bullish positions are still paying shorts to keep trades open — a signal that traders were still betting on upside, even as liquidation pressures mounted.
Positive funding with falling open interest typically signals a flush-out of overleveraged bulls.
Why a Long Squeeze May Be Healthy
While price drops often spook retail traders, a long squeeze is often viewed as a market-cleansing event. It removes excessive leverage, resets market positioning, and can build a more stable foundation for future upside.
Some analysts see this as a bullish reset rather than a trend reversal. As funding rates stabilize and futures positions rebalance, the market may regain strength — especially if macroeconomic factors or inflows support demand.
What’s Next for Crypto Traders?
With leverage levels reduced and spot prices correcting, short-term volatility may persist. However, the absence of aggressive shorting suggests sentiment remains cautiously bullish — not fully risk-off. Traders are advised to monitor funding shifts, open interest trends, and major support zones for signs of recovery.
Disclaimer
This content is for informational purposes only and does not constitute financial, investment, or legal advice. Cryptocurrency trading involves risk and may result in financial loss.