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Bitcoin funding rates stayed negative for 46 days, the longest since 2023, forcing shorts to pay longs daily.
Summary
- Bitcoin funding rates stayed negative for 46 consecutive days, the longest such streak since 2023.
- An estimated 30 to 40 percent of short margin was eroded by funding costs before Strategy’s $2.54B purchase triggered the final squeeze.
- Over $427 million in short positions were liquidated after weeks of margin drain, with Bitcoin now pressing toward the critical $80,000 breakout level.
Bitcoin shorts didn’t just lose money when the squeeze hit; they had been losing money long before it arrived.
For 46 consecutive days, funding rates stayed negative, forcing short traders to pay longs simply to hold their positions.
According to CoinDesk, that stretch marked the longest negative funding period since 2023. When Strategy’s $2.54 billion purchase and Trump’s Iran ceasefire extension finally landed, the damage was already done. The catalysts were just the final blow.
Negative funding rates made holding Bitcoin shorts expensive
Funding rates are periodic payments exchanged between long and short traders in perpetual futures markets. When rates turn negative, shorts pay longs to keep positions open. That cost runs on a clock, not a chart.
As Leverage.Trading outlines in its breakdown of funding rates, at 20x leverage, a 0.05 percent funding charge on notional exposure equals one percent of available margin per settlement.
With three settlements occurring daily, that figure compounds fast. Leverage. Trading’s educational breakdown of funding mechanics lays out exactly how quickly those charges erode a position.
Over 46 days, that steady drain ate through an estimated 30 to 40 percent of the short margin before any major catalyst appeared. Directionally wrong traders were also paying for the privilege of staying wrong, every single day.
Shorts were already near liquidation before the news hit
By the time April’s headlines arrived, short positions were operating on a thin margin. Strategy announced the purchase of 34,164 BTC for $2.54 billion, sending Bitcoin climbing to $77,500, per CoinDesk.
Trump’s Iran ceasefire extension added further risk appetite to the session. Both events hit close together.
The market didn’t need much upward pressure to trigger liquidations at that point. Margin had already been quietly stripped away over six weeks of negative funding.
What looked like a sudden squeeze from the outside was actually the final stage of a much slower process.
Anton Palovaara of Leverage.Trading described it directly:
“Forty-six days of negative funding doesn’t show up on a chart, but it shows up in your margin. By the time the ceasefire news hit, a lot of shorts were already running on fumes.”
They added,
“The liquidations happened fast because the margin was already gone. The headline was just the match.”
Over $427 million in shorts liquidated as margin ran out
Finance Magnates reported more than $427 million in short liquidations across recent sessions. That number reflects how much trapped leverage had accumulated during the extended negative funding window.
Shorts had been positioned for a price drop that kept not materializing.
On April 24, crypto trader CryptoBoss posted a breakdown connecting the setup to historical precedents. He noted that 50 days of deeply negative funding near the $15,500 bottom in 2022 preceded a 48 percent rally to $23,000.
A similar pattern played out during the 2021 China mining ban, where roughly 45 days of negative funding near $29,000 preceded a rally to $48,000.
The 2025 setup matched those conditions closely, with 46 days of negative funding while price ground steadily higher, not lower.
Coinbase premium and the $80k test signal: What comes next?
Alongside the liquidations, Coinbase Premium posted its longest bullish streak since October’s $126,000 high, per CoinDesk.
That streak pointed to consistent spot buying pressure from U.S.-based investors running parallel to the derivatives squeeze. Spot demand and a short-saturated futures market rarely stay in tension for long.
Finance Magnates noted that Bitcoin is now testing the $80,000 breakout level.
Whether that level holds depends on continued spot support and how remaining leveraged shorts respond. Positions that survived the squeeze are still carrying funding risk if rates stay elevated.
The 46-day bleed was not visible on most price charts. However, it showed up clearly in margin balances, and ultimately in the liquidation data that followed.
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