Bitcoin’s perpetual futures market is flashing a familiar signal. Funding rates for BTC perps have turned positive again, which Glassnode links to longs paying shorts on major centralized exchanges.
In perpetual futures, the funding rate is the periodic fee traders exchange. When it’s above zero, longs pay a premium to shorts. Glassnode says that usually lines up with bullish sentiment in the perp market. When the funding rate sits below zero, shorts dominate the trade flow.
What happened
Glassnode’s chart shows the funding rate sliding into negative territory during April and the first half of May. Glassnode ties that to a short-heavy bias, with “significant negative spikes” in April. Those bets ran into the recovery trend. The negative period ended up with shorts getting liquidated as price climbed.
By mid-May, Glassnode reports the funding rate reversed back into green. The key detail is that the shift has held even after Bitcoin pulled back.
CoinGlass adds the near-term consequence of that positioning. The desk’s read of CoinGlass liquidations data says Bitcoin-related positions saw $104 million in liquidations over the past day. More than $85 million of that total involved bullish (long) contracts.
Why it matters
Positive funding rates matter because they reflect crowding. If longs are paying premiums consistently, they’re effectively underwriting their own risk. CoinGlass’s liquidation mix suggests that crowding has already bitten, even while funding stays elevated.
That matters for volatility mechanics. A high positive funding rate can coexist with a cooling price. But if the market drops sharply enough, long positions can get forced out in volume.
Glassnode frames the next step as a potential long squeeze setup. A long squeeze is when a downward move triggers a cascade of long liquidations.
Market impact
The market impact here is not a price call. It’s a liquidity and risk call.
Funding rates turning positive can encourage more leverage on the long side, while a pullback creates the trigger for liquidations. CoinGlass’s $104M liquidation total over 24 hours, with $85M tied to long contracts, is the clearest “right now” datapoint in the source text.
| Metric | What the source says | Implication |
|---|---|---|
| Funding rate (perps) | Glassnode says it has turned positive recently | Long positions dominate funding payments to shorts |
| Funding rate trend | Glassnode shows it was negative in April and early May, then flipped green mid-May | Short bias broke during recovery, sentiment shifted |
| Liquidations (24h) | CoinGlass shows $104M liquidations total | Leverage got flushed during the pullback |
| Long liquidation share | CoinGlass says $85M+ of the $104M involved bullish contracts | Long-side risk is currently active |
Bitcoin itself is back around the $75,900 level after the latest pullback, according to the source.
What to watch next
Glassnode’s post stops short of certainty. It points to conditional risk. The desk’s next checkpoints from the source are straightforward.
First, whether the funding rate stays positive as price continues to wobble. Second, whether CoinGlass liquidation totals keep skewing toward long contracts. Third, whether a sharper decline follows that would make a long squeeze more than a “possible” scenario.
If the funding rate remains high and the liquidation trend persists, the conditions for a cascade get closer. If funding mean-reverts or liquidations even out across long and short, the squeeze risk fades.