Crypto Analyst Murphy: Perpetual Funding Rates Hit $390K/Hour on May 28, Liquidation Risk Exceeds Short Squeeze

According to analyst Murphy via BlockBeats, on May 28, long positions in the perpetual futures market paid approximately $390,000 per hour to short positions in funding fees, significantly exceeding the 7-day average of $220,000. This elevated rate indicates strong bullish sentiment but poses mounting costs for long holders. Murphy noted that since May 12, when the 7-day funding rate average turned positive, long premiums have continued to expand. High funding rates typically cannot be sustained indefinitely; if prices fail to rally quickly, some long positions may close due to cost pressure.

Open interest (OI) has entered a declining phase, signaling ongoing liquidations and position reductions. Murphy stated that if BTC breaks key support levels again, cascading liquidations could trigger a classic "long squeeze." He assessed the current market environment as presenting greater downside liquidation risk than upside short-squeeze potential, contrasting sharply with the positive funding fee environment in mid-April.