- Bitcoin funding rates stay negative for six of seven days on Binance, reflecting traders’ disbelief as the market begins its recovery phase.
- The accumulation of short positions may serve as a catalyst to an upside rally, which may in turn lead to a short squeeze to $113,000 and $126,000.
- Trends of 2024 and 2025 indicate that there are usually long periods of disbelief that lead to huge bullish reversals that convert doubt into market force.
There is potentially a new phase of disbelief in the Bitcoin market with negative funding rates continuing to suggest that traders remain unconvinced of the recovery is really taking place. If the market permits, the set up can form the basis for the next big upside move.
Market Caution Persists Despite Uptrend Signals
Crypto analyst Darkfost highlighted that the market appears to be entering a disbelief phase — a stage that follows major corrections, when participants hesitate to trust the renewed bullish momentum. On Binance, which remains the leading futures platform, BTC funding rates have stayed negative, showing that short positions continue to dominate.
Over the past week, funding rates were negative for six of seven days, hovering around -0.004%. This behavior stems from the October 10 liquidation wave, which shook confidence across derivatives markets. Many traders, still wary of losses, prefer to short the market rather than risk further pullbacks.
However, this persistent negativity may indicate more than just caution. Historically, such conditions often precede a strong reversal. When funding rates remain below zero while prices stabilize or climb, it can signal that the market is preparing for a momentum shift driven by short liquidations.
Negative Funding as a Setup for Short Squeeze
Darkfost noted that the longer traders maintain disbelief, the stronger the potential becomes for an explosive move. As short positions build against an uptrend, a sudden burst of buying pressure can force liquidations — a dynamic known as a short squeeze. This reaction drives prices sharply higher as shorts are closed to prevent further losses.
Previous market patterns offer clear examples.September 2024 saw Bitcoin fall to $54,000, only to bounce back with heavy short-unwinding to surpass $100,000. Then again, in April 2025 traders interpreted the early bullish signals incorrectly and held onto their short positions while Bitcoin rose from $85,000 to $123,000.
If the current trend continues, the same dynamic could unfold. According to Darkfost, liquidity concentrations are visible around $113,000 and $126,000 — levels where many short orders could be triggered. A breakout beyond these zones could accelerate momentum further as traders scramble to exit losing positions.
Disbelief as the Foundation for the Next Move
The disbelief phase incoming narrative reflects how psychology shapes market cycles. After severe downturns, many participants remain skeptical, dismissing early recoveries as temporary. This hesitation keeps selling pressure alive even as technical indicators start turning bullish.
As history shows, the longer the disbelief persists, the more potential energy builds beneath the surface. Negative funding rates, while reflecting caution, can become the very catalyst that drives the next rally once the market turns decisively upward.
If Bitcoin continues stabilizing and short interest remains high, this phase could transform into a powerful upward breakout. The current setup suggests that the market’s disbelief may soon transition into a renewed phase of conviction — potentially igniting the next major move in Bitcoin’s ongoing cycle.
