Chainlink (LINK) is exhibiting classic short-squeeze dynamics, according to fresh data from the Crypto.com exchange. The network’s funding rate for LINK has turned negative, currently sitting at -1.441% per 8 hours. This metric indicates that traders betting on a price drop are paying those betting on a price rise, a sign that short positions have become heavily crowded and potentially overextended.
This bearish sentiment is being met with a surge in spot demand. LINK’s price has climbed 6.96% over the last 24 hours, accompanied by a trading volume of $761,515. This upward price action combined with active volume suggests that longs are aggressively taking profit, which provides the necessary liquidity to force shorts to cover their positions.
Source: Crypto.com exchange public funding rate data
What would change this read
The bullish thesis would be invalidated if the funding rate flips positive, signaling that shorts are no longer paying longs and the market sentiment has shifted back toward bearishness. Additionally, a reversal in LINK’s price direction despite the current spot volume would indicate that the recent momentum lacks fundamental support.
