"Data from futures markets shows that funding rates have recently turned negative. This means that the majority of traders were betting against Bitcoin, shorting the market even as price bounced from one hundred and eight thousand to above one hundred and fifteen thousand. Historically, these periods of negative funding have ended with short squeezes, where leveraged traders are forced to close positions at a loss and fuel a sharp upside move."
"While September is often a weak month for Bitcoin, this year closed with a positive return. In past cycles, a green September has consistently been followed by strong gains into the final quarter of the year. In 2024, the market rallied nearly fifty percent in the two months that followed. Similar strength was seen in 2023, and even in the mid-cycle years of 2015 and 2016 when Q4 delivered some of the best returns of those cycles."
Bitcoin volatility has compressed to historically low levels that previously preceded major trending moves. Futures market funding rates have turned negative, indicating a majority of traders are shorting the market even as price rose from one hundred eight thousand to above one hundred fifteen thousand. Open interest has risen during consolidation, signaling growing speculative positioning that can amplify moves when volatility returns. Historical instances of negative funding have led to short squeezes and sharp upside moves. Seasonal patterns show that a positive September often precedes strong Q4 gains, bolstering the case for a bullish breakout as quarter four unfolds.
Read at Bitcoin Magazine
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