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Bitcoin (BTC) began the trading session with renewed bullish momentum, briefly surging above the $76,000 resistance level that has capped price action for more than two months. The move, however, failed to hold, and BTC slipped back below $74,000 before stabilizing around $74,300. Despite the failed breakout, the cryptocurrency is still up 1.3% over the past 24 hours.
Ethereum (ETH) followed a similar pattern, pulling back from highs above $2,400. Still, it outperformed Bitcoin, posting a 2.5% daily gain, reflecting continued investor interest in altcoins amid broader market uncertainty.
Traditional markets moved higher while crypto remained more mixed. The Nasdaq rose 2% to close at its session high, and the S&P 500 climbed 1.2%, sitting just points away from an all-time record.
In contrast, Bitcoin remains roughly 40% below its historic peak of $126,000, underscoring the performance gap between crypto and equities.
Despite Tuesday’s failed breakout, analysts say conditions may be forming for a significant short squeeze in crypto. Vetle Lunde, head of research at K33 Research, pointed to Binance Bitcoin perpetual contract funding rates staying negative for 11 straight periods, even as prices rose.
According to Lunde, negative funding rates alongside rising open interest suggest traders are continuing to position bearishly while new short positions are being added rather than unwound.
Lunde also noted that the 30-day average funding rate has remained negative for 46 consecutive days. He described this streak as comparable to high-stress periods such as the FTX collapse in late 2022 and China’s Bitcoin mining ban in mid-2021.
Historically, crowded bearish positioning environments have created strong entry opportunities, as forced short liquidations can trigger rapid upward price moves in Bitcoin.
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