Bitcoin Long Squeeze Incoming? Funding Rates Surge Up

On-chain data shows the Bitcoin funding rates have observed a rise again, suggesting that another long squeeze may be in store for the crypto.
Bitcoin Funding Rates Show Relatively High Positive Value
As explained by an analyst in a CryptoQaunt post, the current positive funding rates may mean the price could observe a decline soon.
The “funding rate” is an indicator that measures the periodic fee that Bitcoin futures traders are paying each other.
When the value of this metric is greater than zero, it means long traders are paying a premium to short investors to hold on to their positions right now. This trend therefore suggests that the majority sentiment is bullish at the moment.
On the other hand, negative values of the indicator imply that a bearish sentiment is more dominant as shorts are paying longs currently.
Now, here is a chart that shows the trend in the Bitcoin funding rates (72-hour MA) in the year 2022 so far:

Looks like the value of the metric has surged up recently | Source: CryptoQuant
As you can see in the above graph, the quant has marked the points where the Bitcoin funding rates reached a peak during the last few months.
It seems like shortly after relatively high positive funding rates occurred, the price of the crypto observed a steep decline.
A long squeeze is a mass leverage flush event where long liquidations cascade together. Such a squeeze can sharply drive the price down and the above instances seem to have been marked by this squeeze.
A short squeeze, on the contrary, can rather uplift the price. The analyst therefore argues that the Bitcoin market will require negative funding rates if the price has to observe any real improvements.
However, as longs are currently dominating the futures market, a long squeeze will need to happen to take the funding rate down and pile up shorts.
But with that, the price of the crypto may also suffer another plunge down just like the instances earlier in the year.
BTC Price
At the time of writing, Bitcoin’s price floats around $39.5k, down 1% in the last seven days. Over the past month, the crypto has lost 15% in value.
The below chart shows the trend in the price of the coin over the last five days.

The price of BTC seems to have observed a sharp rise in the past twenty-four hours | Source: BTCUSD on TradngView
Bitcoin has been struggling for many months now and the price has recently shown no signs of any real recovery as it remains stuck below the $40k level.