For the first time in 3 years, the funding rate index has returned to negative levels for an extended period, marking a strong trend reversal.

In the history of funding rates, excessively negative means that shorts are paying very high fees to longs to maintain their positions, and the crowd is extremely bearish.

This leads to an imbalance in positions, as a slight price reversal can also cause short positions to close.

This causes shorts to buy back their positions when closing, leading to a significant price increase.

Historically, there have been about 5 instances where negative funding has been maintained continuously for over 20 days, after which prices have sharply reversed.

If negative funding continues to persist, there is a high possibility of a short squeeze occurring.