Bitcoin Open Interest Nears $25 Billion as Analysts Expect Short Squeeze

Bitcoin had fallen 21% from its highs around June 5, 2026, briefly sliding to $61,100 on Friday and liquidating $335 million in leveraged long positions. Perpetual futures funding rates reflect demand for long and short leverage. Laevitas data showed the annualized rate falling to minus 2%, signaling long deleveraging and rising bearish bets while increasing the risk of forced short covering in a rebound.

CoinGlass data showed short positions concentrated between $63,000 and $66,000. If Bitcoin rebounds from $62,000 to $66,000, about $2.6 billion in shorts could be liquidated. By contrast, another 8% decline to $57,000 is estimated to liquidate $1.2 billion in longs. SoSoValue said spot ETFs recorded net inflows of just $3 million as of June 4 after $5.1 billion in outflows over 15 days, indicating the trend had yet to reverse.

Bitcoin has recently held above $76,000 even as short positions continue to build in the futures market. If the price rises to margin thresholds, exchanges will forcibly close those positions through buybacks, potentially triggering a cascade of short squeezes. Dovish signals from the Federal Reserve, coupled with stronger spot demand, would make $80,000 a key battleground.

As of July 19, 2026, about $1.4 billion in short positions accumulated over the previous 48 hours faced liquidation risk. A liquidation map also showed roughly $4 billion in short positions clustered above $80,000. Markets are also watching progress on an Iran peace agreement; if improving risk appetite spurs buying, Bitcoin could quickly test $80,000.

Negative funding rates for Bitcoin perpetual futures mean short sellers must pay long-position holders, typically signaling deeply bearish market sentiment. Large traders on decentralized derivatives platform Hyperliquid are bucking the trend by adding to long positions. If prices continue to rise, forced liquidations of crowded shorts could further amplify Bitcoin’s gains.

As of July 19, 2026, Bitcoin funding rates had remained negative for 47 consecutive days, with annualized costs for some short sellers reaching 19%. Meanwhile, Bitcoin was approaching $80,000 and Hyperliquid whales’ net-long position had climbed to its highest level this year. The extreme standoff between bearish retail traders and increasingly bullish whales has put the market on alert for a large-scale short squeeze.