Bitcoin is attempting to recover toward $64,000 as derivatives indicators hint at building short-squeeze pressure, after the cryptocurrency slipped to around $63,000 amid escalating geopolitical tensions tied to U.S. and Israeli strikes on Iran.

Data from CoinGlass show perpetual futures funding rates tumbling to roughly -6%, the second-deepest negative reading in the past three months. The last comparable extreme occurred on Feb. 6, when bitcoin established a local floor near $60,000 before rebounding.

Perpetual funding rates are recurring payments exchanged between traders in futures markets. When funding is positive, traders holding long positions pay those with shorts. When funding turns negative, short sellers compensate longs. Deeply negative rates typically signal aggressive bearish positioning, as traders are effectively paying to maintain downside exposure.

At the same time, coin-margined open interest climbed from 668,000 BTC to 687,000 BTC over the past 24 hours. Measuring open interest in BTC terms strips out distortions caused by price volatility, offering a clearer view of positioning trends. Rising open interest alongside sharply negative funding suggests expanding participation, with positioning skewed toward further declines.

Liquidations have added to the volatility. More than $500 million in crypto positions were erased over the last day, according to CoinGlass data, with long positions accounting for over $420 million of that total. The imbalance underscores the scale of forced selling as prices weakened.

The combination of deeply negative funding, growing open interest and substantial long liquidations points to crowded bearish trades and elevated derivatives activity — a setup that can intensify price swings and potentially ignite a short squeeze if momentum shifts higher.