Recent drops in Bitcoin’s funding rates have ignited speculation about a possible short-squeeze rally towards the $90,000 mark. This development arises from a confluence of factors including institutional sell-offs and changing market dynamics. The negative funding rates suggest a predominance of short positions, potentially influencing BTC price movements. Analysts observe that this change in funding rate coincides with declining open interest, particularly for Bitcoin perpetual futures contracts, which further indicates exhausted selling pressure. This situation has significant implications for financial markets as the decline in open interest reveals a significant decrease in leveraged positions. Matthew Sigel, Head of Digital Assets at VanEck, points to the dramatic drop in open interest (-20% in BTC terms) for Bitcoin perps as contributing factor to this shift in funding rates. This potential market reversal might lead to unwinding and price rallies if past trends hold true. Historical data suggests that negative funding rates often trigger price rebounds, prompting analysts to look back at events like the March 2024 surge as possible indicators of future market behavior.