How bitcoin liquidations and funding rates could shape the next move for BTC and altcoins

Bitcoin has slid back to the crucial $60,000 area, and traders are on edge as liquidation clusters build just below the current price. At the same time, funding rates are flipping negative across BTC and major altcoins, hinting at an important shift in market positioning. Put together, these signals suggest a likely short-term relief move before any deeper downside plays out.

Bitcoin at $60k: why this level matters

On higher timeframes, bitcoin is still in a broader corrective phase. A popular trend indicator on the weekly chart remains bearish, confirming that the larger trend has not yet reversed back to a clear uptrend.

However, momentum indicators are starting to show early signs that selling pressure may be getting exhausted. The weekly RSI (Relative Strength Index) is hinting at a possible bullish divergence: price has been making lower lows or flattening out, while RSI is trying to form higher lows. This kind of pattern often appears near major bottoms, but it takes weeks or even months to fully confirm.

In other words, bitcoin may be in the early stages of building a larger bottom structure, but it’s too early to call a confirmed macro low. The process could easily stretch through Q3, similar to how the 2022 bear market bottom took time to form.

Short-term outlook: oversold signals and likely relief

Zooming into the 3-day chart, bitcoin is sitting right on a key support zone around $60,000, which lines up with previous lows and historical support. The 3-day RSI has dropped into oversold territory, something that doesn’t happen often and usually signals that the market is due for at least a pause or bounce.

On the 12-hour chart, RSI is even more stretched, showing the most oversold reading in a long time—more extreme than during the February crash. This doesn’t guarantee a big rally, but it does make it likely that the aggressive selling will cool down.

Based on these oversold conditions, the most probable short-term scenario over the next 1–2 weeks is:

• A minor bounce or choppy sideways consolidation rather than an immediate further crash
• RSI resetting from oversold back toward neutral, which would “reload” the market for a possible next leg down later

Key bitcoin levels to watch

Several price zones stand out as important over the coming days and weeks:

• Support around $60,000: This is the current major floor. As long as BTC holds above it, short-term relief remains likely.
• First downside liquidity target near $58,500: There is a large cluster of liquidations just below current price, making this a high-probability level to be tagged at some point, even if only via a quick wick.
• Major support in the low–mid $50k range: If $60k eventually breaks decisively, the next big support zone sits roughly between $53,000 and $55,000. A move into this region could help complete a larger bullish divergence on the weekly chart.
• Short-term resistance around $62,500–$63,000: If BTC bounces, this is the first major resistance area.
• Higher resistance at $65,500–$66,000: A stronger relief rally would likely struggle here, where prior support has turned into resistance.

For a deeper dive into how this $60k region fits into the bigger picture, it’s worth comparing with the broader macro context discussed in bitcoin at $60k: what this drop really means for BTC, ETH, XRP and altcoins.

Liquidation heatmaps: why $58.5k is a magnet

Bitcoin liquidation heatmaps show where large clusters of leveraged positions are likely to be forced out of the market. Price often gravitates toward these zones, especially when they are close and aligned with the current trend.

Recently, BTC already swept a big liquidity pocket around $61,500. The next notable cluster now sits around $58,500, with additional but smaller liquidity around $54,000–$55,000. This makes $58,500 a very realistic target, either via:

• A quick spike down to clear out positions before a short-term bounce, or
• A delayed move lower after a period of sideways or slightly upward price action.

In both cases, the market’s tendency to “hunt” liquidity means traders should be prepared for volatility around these levels.

Funding rates are flipping negative: why that matters

Funding rates track the balance between long and short positions in perpetual futures. When funding is positive, longs pay shorts, and when it’s negative, shorts pay longs.

During most of the recent BTC pullback, funding stayed near neutral, suggesting that the drop was driven more by spot selling than by aggressive shorting. Now, however, funding rates across bitcoin and many large altcoins are starting to turn negative.

This shift tells us:

• More traders are piling into short positions after the big move down.
• Shorts are now paying a premium to stay in their trades.
• Longs are being paid to hold, which can attract contrarian traders.

The more negative funding becomes, the higher the risk of a short squeeze—where price moves up quickly, forcing overleveraged shorts to close at a loss, which adds fuel to the bounce. At the moment, funding is only modestly negative, so this points to a likely modest relief move rather than a full-blown trend reversal.

Medium-term scenario: relief first, then possibly lower

Putting the pieces together—oversold RSI, nearby liquidity, and increasingly negative funding—the most reasonable roadmap for bitcoin looks like this:

• Short term (next few days to 1–2 weeks): A slight bounce or sideways consolidation, potentially with a quick dip to sweep liquidity around $58,500.
• Medium term (next few weeks to 1–2 months): After relief, another leg down remains likely, possibly into the low–mid $50k range, where a larger weekly bullish divergence could complete and a more durable bottoming process could begin.

This is not a guarantee, but it’s the path that best fits the current technical signals and positioning data.

Bitcoin dominance and what it means for altcoins

Bitcoin dominance (BTC’s share of the total crypto market cap) is also hovering at an important support zone around 58–58.5%, with resistance near 61%. The current structure suggests that BTC dominance may hold roughly steady rather than making a big move up or down in the immediate term.

When dominance is stable, altcoins tend to move broadly in line with bitcoin. That means many large-cap altcoins are likely to:

• See a similar short-term relief bounce or sideways consolidation
• Remain vulnerable to another leg lower if BTC resumes its downtrend later

Ethereum: strong support but still in a downtrend

On the 3-day chart, Ethereum is holding a long-standing support zone between $1,500 and $1,600. This area has acted as a key floor multiple times over several years, making it a crucial level for ETH bulls to defend.

ETH’s 3-day RSI is also deeply oversold, reinforcing the idea that the market needs a breather. Combined with the strong support zone, this setup favors a short-term bounce or sideways consolidation over the next 1–2 weeks rather than immediate heavy downside.

However, ETH still faces stiff resistance higher up, particularly between $2,200 and $2,400, where it has been rejected several times this year. Until that zone is reclaimed, the larger trend remains corrective. For more context on why ETH has been underperforming at times, you can compare this with the dynamics discussed in why Ethereum is crashing harder than bitcoin right now.

XRP: short-term pause, long-term pressure

XRP’s weekly chart still shows a clear larger downtrend, with no confirmed major reversal signal yet. The key level to watch on the weekly close is around $1.13. If weekly candles start closing decisively below this area and fail to reclaim it, the next major support zone sits lower, roughly between $0.90 and $1.00.

In the very short term, XRP is likely to mirror bitcoin’s behavior: a modest bounce or sideways consolidation over the next week or two, followed by the risk of another leg down if BTC weakens again. Any short-term strength should be treated cautiously within the context of the broader bearish structure.

Solana: a big bullish divergence is forming

Solana remains in a clear downtrend on the 3-day chart and has recently broken below a major support zone between $75 and $80, which now turns into resistance. That’s the bearish side of the picture.

On the bullish side, Solana is forming a large bullish divergence on the 3-day RSI:

• Price has made clear lower lows, both in candle closes and wicks.
• The RSI, however, is trying to form higher lows compared to the extreme readings seen during the February crash.

This divergence is not fully confirmed yet, but given how low RSI dropped previously, it would take a very deep new selloff (well below $40–$50) to invalidate it. If price can stabilize and RSI holds a higher low, this divergence could trigger a more meaningful relief move.

That relief might look like:

• A larger sideways range forming over several weeks, or
• A decent bounce back toward former support zones (now resistance), before any potential continuation of the downtrend.

Traders should treat any strong bounce as a relief rally within a larger bearish structure unless Solana can reclaim and hold above key resistance levels.

Chainlink: similar setup to Solana

Chainlink’s 3-day chart shows a very similar story to Solana’s:

• The larger trend is still down, with no confirmed macro reversal yet.
• Price has made lower lows, but the 3-day RSI is trying to form higher lows, creating a potential bullish divergence.

If this divergence confirms over the coming days or weeks, LINK could see a larger relief move. One logical target area would be the previous support zone between $7.90 and $8.50, which is now likely to act as strong resistance.

Over the next few weeks, the most likely pattern for Chainlink is:

• A modest bounce or sideways consolidation as the divergence plays out
• Heavy resistance and possible rejection near the $7.90–$8.50 region

How to think about this market environment

Across bitcoin, Ethereum, XRP, Solana, Chainlink, and many other altcoins, the message from the charts is broadly consistent:

• The larger trend is still bearish or corrective; there is no confirmed macro reversal yet.
• Short-term conditions are oversold, and funding rates are turning negative, which favors a relief bounce or sideways consolidation.
• Significant liquidity sits just below current prices, so sharp wicks down to sweep these levels remain a risk.

For traders, this environment often rewards patience and risk management. Chasing fresh shorts after a big move down can be dangerous when funding is negative and RSI is oversold, as even small squeezes can be violent. At the same time, assuming that any bounce is the start of a new bull run can be equally risky while the higher timeframes remain in a downtrend.

Watching funding rates, key support and resistance levels, and whether bullish divergences confirm on higher timeframes can help you navigate the next few weeks more confidently.