Bitcoin Reaches $103K as Funding Rate Turns Positive Post-Liquidations

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Bitcoin Reaches $103K as Funding Rate Turns Positive Post-Liquidations – Crypto News

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May 10, 2025

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Bitcoin has revisited the $100,000 mark for the first time in months, gaining nearly 5% in the past week. As of the time of writing, BTC is trading at $102,922, up 3.5% on the day and just 5.2% shy of its all-time high of $109,000 recorded in January.

The latest push above this critical psychological threshold marks a renewed phase of bullish market behavior, following weeks of range-bound trading between $93,000 and $98,000.

Short Liquidation Clusters Ignite Rally

According to insights shared by CryptoQuant contributor Amr Taha, the recent rally has been driven in part by a sequence of short liquidation events on Binance.

These events not only removed downward pressure from the market but also flipped the derivatives funding market, signaling a possible change in trader sentiment. Taha explained that a large cluster of short positions had accumulated in recent days, creating conditions ripe for a squeeze.

Taha noted that the first key liquidation occurred at the $97,000 level, where a large number of short positions were wiped out, totaling approximately $360 million.

Traders had positioned themselves for a local top, but instead, BTC broke through this zone, triggering a cascade of short covers and forced liquidations. This resulted in a rapid price acceleration as sellers were pushed to close their positions.

Shortly after this surge, the price consolidated below the $101,000 mark, where another dense cluster of short interest had formed. This acted as a magnet for a second liquidation wave.

Bitcoin liquidation heatmap. | Source: CryptoQuant

When BTC breached $101,000, nearly $240 million in shorts were liquidated, contributing to a breakout that pushed the price toward $104,000. Data from liquidation heatmaps highlighted both $97,000 and $101,000 as high-liquidity targets, reinforcing the narrative that these were calculated liquidation sweeps.

Bitcoin Funding Rate Shift Signals Bullish Sentiment

The impact of these events extended beyond spot price movement. Taha pointed to Binance’s funding rate chart, showing that prior to the liquidation events, the funding rate was negative, a reflection of bearish bias among traders who were paying to maintain short positions.

Following the twin liquidation waves, the funding rate flipped to +0.01%, a key signal that demand for long exposure was increasing.

Bitcoin funding rates on finance. — Bitcoin funding rates on Binance. | Source: CryptoQuant

This transition from negative to positive funding is often interpreted as a shift in market structure, from bear-dominated to bull-dominated sentiment. It suggests that many traders now expect further upside, at least in the near term.

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Additionally, the rapid adjustment in funding rates highlights the impact that derivative market positioning can have on spot price behavior, especially during periods of thin liquidity or elevated leverage.