Bitcoin short bets hit three year extreme as price drops below $70,000

Thursday 12 March 2026 - 15:20

By: Dakir Madiha

Bitcoin short bets hit three year extreme as price drops below $70,000

Bitcoin fell below the $70,000 threshold on Thursday as surging oil prices and geopolitical tensions in the Middle East unsettled financial markets. At the same time, derivatives data shows traders have built the most aggressive short positions in nearly three years, raising the risk of a sudden market reversal.

According to data from CryptoQuant, Bitcoin’s 30 day funding rate percentile dropped to about 6 percent, its lowest level since early 2023. The metric indicates that during 94 percent of the past month funding rates were higher than the current level, signaling a heavy tilt toward short positions in perpetual futures markets.

CryptoQuant analyst Leo Ruga said the average daily funding rate has steadily deteriorated over recent months. It declined from about +0.005 percent in January to -0.003 percent in February, and reached roughly -0.004 percent in March. Out of the last 30 trading sessions, 25 ended with negative funding rates, reflecting strong bearish positioning among derivatives traders.

This imbalance has created an asymmetric risk profile for the market. Analysis from TradingKey suggests that a 10 percent upward price move could trigger around $4.3 billion in short liquidations. In comparison, a similar downward move would liquidate approximately $2.35 billion in long positions.

Data from Coinglass indicates roughly $1.3 billion in short positions are concentrated above the $73,600 level across major centralized exchanges. If Bitcoin climbs into that range, forced liquidations could accelerate a rapid upward move.

Despite the bearish derivatives positioning, activity in the spot market suggests a more stable underlying demand. Investment firm QCP Capital described the recent price action as a stabilization phase, noting significant on chain accumulation by long term holders in the $60,000 to $70,000 range.

Spot Bitcoin exchange traded funds also recorded renewed inflows, with about $250 million entering funds on Tuesday. The inflows marked two consecutive days of positive investment flows into the products.

Bitcoin has traded within a broad band between $60,000 and $70,000 since late 2025. Earlier in March the cryptocurrency briefly climbed to around $71,500 before retreating. It was last trading near $69,300 after slipping below $70,000 ahead of the latest US consumer price index report.

Other major cryptocurrencies, including Ethereum and Solana, have shown similar patterns. Both assets are trading within narrow liquidation zones where modest price movements could trigger cascading forced liquidations across leveraged positions.

Recent market history underscores the potential for rapid shifts. On March 4, Bitcoin surged above $73,000 and forced more than $463 million in short liquidations across derivatives markets. A comparable event on February 25 saw roughly $400 million in short positions wiped out when the price rebounded from just above $60,000 to nearly $69,000.

CryptoQuant analysts warn that extreme one sided positioning often resolves abruptly rather than gradually. With macroeconomic catalysts approaching, including a US consumer price index release and a Federal Reserve meeting scheduled for March 17 to 18, traders are watching closely for the next major move in the cryptocurrency market.