Bitcoin Short Squeeze Signal Emerges: Negative Funding Rate and Liquidity Buildup, Ethereum and Solana Break Key Resistance

Recent crypto market signals show a new short-term development: Bitcoin price is trending slightly higher while liquidity builds overhead and the funding rate turns negative, potentially setting up a fresh short squeeze. At the same time, Ethereum has confirmed a breakout above key resistance, Solana is attempting to break through an important range, and Chainlink is once again testing a long-term critical level.

Bitcoin Weekly Supertrend About to Flip Green

The Supertrend indicator on Bitcoin's weekly chart is showing its first sign of turning green since entering bearish territory in November 2025. On larger timeframes, this indicator typically helps gauge whether the market is in a bull or bear phase. The flip has not yet been confirmed; it requires a weekly close above roughly $80,000 to be validated. The next weekly close is about 3 days away. If price falls back below $79,000 during this period, the flip signal will be invalidated. If it can hold above $80,000 or even push higher, the trend reversal could be confirmed.

Long-Term Bullish Logic: Massive Bullish Divergence and Historical Similarity

Over the past two months, Bitcoin has been rebounding from the $60,000 area, with a large-scale bullish divergence on the daily chart still in play. This signal last confirmed at the end of the 2022 bear market, which was followed by a prolonged rally. The current price action bears some resemblance to late 2022, as the market gradually enters a larger bullish recovery phase. If more confirmation signals emerge, such as the Supertrend flipping green and a breakout above the previous high of $82,000-$83,000, it would further support a bullish outlook for the coming months and potentially 1-2 years.

Short-Term Resistance and Support: $80,000-$82,000 Zone Under Pressure

On the 3-day chart, Bitcoin still faces resistance in the $80,000-$82,000 zone, which corresponds to the high from early May this year. Price may see a short-term pullback or consolidation here, but the overall direction remains bullish. Key support below lies at $73,000-$75,000, an area that previously acted as resistance and has now flipped to support. If price breaks above $82,000-$83,000, it would form the first significant higher high since the all-time high, with the next resistance at $86,000-$88,000.

Overbought Conditions and Potential Bearish Divergence Warning

The 3-day and daily RSI both indicate overbought conditions, suggesting a near-term cooling off period is possible. If the daily RSI makes a lower high while price makes a higher high after a slight pullback, a bearish divergence could form, triggering a short-term correction. However, such a correction is more likely to be a minor pullback or consolidation rather than a trend reversal.

Liquidity Buildup and Negative Funding Rate: Short Squeeze Signal

In the past 2-3 hours, significant liquidity has been building in the $81,300-$81,500 range above Bitcoin, making it a short-term target. At the same time, the funding rate for Bitcoin and the broader crypto market has turned negative. Although it has not moved far from neutral (around 0.01%), it indicates strong spot buying while futures shorts are paying a premium to short. Over the past few weeks, Bitcoin ETFs have recorded substantial inflows, reflecting robust spot demand and persistent short squeezes. With shorts now adding positions again, another short squeeze could be triggered, pushing price higher by 5%-15%. Therefore, shorting in the current environment carries high risk.

Bitcoin Dominance: Range-Bound, No Extreme Divergence

On the 3-day chart, Bitcoin dominance remains within the large range that has persisted since late 2025, with resistance at 60.5%-61%. In the short term, Bitcoin is slightly outperforming some altcoins, but overall market correlation remains high, with most major altcoins moving similarly to Bitcoin.

Ethereum: Confirmed Breakout Above $2.4K Resistance, Structure Turns Bullish

Ethereum has now closed two consecutive 3-day candles above $2,400, confirming a breakout above the key resistance zone ($2,300-$2,400) and forming its first higher high since October 2025. The price structure has officially turned bullish. With price currently around $2,500, any pullback would see $2,300-$2,400 act as support. The next resistance above is at $2,750-$2,800, followed by targets at $3,350-$3,400.

Solana: Attempting to Break $105 Key Resistance

On the 3-day chart, Solana is attempting to break through the $95-$105 resistance zone. Price reached a high of around $109-$110 and is currently trading near $108. The breakout has not yet been fully confirmed; a 3-day close above $105 is needed. If confirmed, the next target is $120, followed by the $140-$150 area. Support below is expected at $95-$100. The 3-day RSI is also overbought, so a short-term pullback is possible, but the overall structure remains bullish.

Chainlink: Testing $12 Key Level Again

Chainlink is once again testing the $1,180-$1,230 (approximately $12) resistance zone on the 3-day chart, which has repeatedly acted as key resistance. If a daily or 3-day close above $1,230 is achieved and held, the next target is $1,410-$1,430 (above $14). The 3-day RSI is overbought, so a short-term cool-off may occur, but price has been forming higher lows and higher highs, keeping the overall trend bullish.

Summary: Short-Term Consolidation Possible, Medium-Term Outlook Bullish

Bitcoin faces overbought conditions and potential bearish divergence in the short term, which could lead to a pullback or sideways movement. However, liquidity buildup and negative funding rates suggest a short squeeze risk, making shorting inadvisable. Ethereum and Solana have both shown structural breakout signals, while Chainlink is testing key resistance. The overall medium-term market direction remains bullish, and short-term volatility is a normal part of the adjustment.