Analysis: The current market faces greater downside pressure than upside risk of a short squeeze, and funding costs for long positions continue to rise.

According to ME News, on May 28th (UTC+8), crypto analyst Murphy stated that in the current perpetual contract market, long positions are paying approximately $390,000 in funding fees to short positions per hour, significantly higher than the 7-day average of $220,000. This indicates that long sentiment is clearly dominant, and long positions are bearing high holding costs. He pointed out that since the 7-day funding fee average turned positive on May 12th, the long premium has continued to widen, especially in recent days. High funding fees mean that long positions cannot sustainably subsidize short positions in the long term, and if prices fail to rebound quickly, some long positions may proactively close out due to cost pressures. Simultaneously, the market's open interest (OI) has entered a downward trend, indicating that liquidation and position reduction are underway. Murphy believes that if BTC breaks below key support levels again, it could trigger a chain of forced liquidations, forming a typical "long squeeze" market. He stated that the current market state contrasts sharply with the sustained upward trend following April 14th, 2026, when funding fees remained negative for an extended period, with short positions continuously paying fees to long positions. However, it also points out that extreme funding costs can sometimes trigger a "long squeeze" before a reversal occurs. Overall, however, it tends to believe that the current market faces a greater risk of a "downward squeeze than an upward short squeeze." Murphy cautions that current spot demand and on-chain activity are both low, and contract trading is significantly more difficult, so investors should be cautious about participating in leveraged trading; while those dollar-cost averaging in spot or gradually building long-term positions can maintain their current strategies. (Source: ME)