Murphy: With high long funding rates, the risk of market downside squeeze is greater

According to crypto analyst Murphy, in the perpetual contracts market, longs are paying shorts approximately $390,000 in funding fees every hour, which is higher than the seven-day average of $220,000. This indicates bullish sentiment dominates, but the cost of holding long positions is relatively high. Since May 12, when the seven-day average funding fee turned positive, the long premium has continued to widen, becoming especially evident recently. Murphy noted that high funding fees are difficult to sustain over the long term, and if BTC falls below a key support level, it may trigger a cascade of liquidations, resulting in a "long squeeze." He cautioned that spot demand and on-chain activity are low, and advised exercising caution with leveraged trading.