Bitcoin turned lower after touching $81,479 on 27 August and broke below $78,000 on the 29th, printing an intraday low of $76,845.71. The trigger was macro: Fed chair Warsh said at Jackson Hole that there is “still work to do” before inflation returns to 2%, CME FedWatch odds of a September hike jumped from 35.4% the previous day to 55.7%, and the two-year Treasury yield rose 7.84 basis points to 4.312%. Roughly $6.4 billion of BTC options expired the same day.
What blew up was leveraged longs
Futures liquidations came to about $82.54 million over 24 hours, 87.6% of it longs. Spot ETF flows turned negative on 28 August (preliminary reading −$105.6 million), interrupting a run of net inflows.
Read together, those numbers say one thing: what fell was leverage, not demand. The leg down from $80k was driven mainly by longs being forced out, not by anyone selling size into spot at the lows.
Funding did not turn negative in a single period
This is the column that actually matters for an arbitrage position.
- Current OI-weighted funding: 0.0086% / 8 hours
- Seven-day average: 0.0065% / 8 hours
- Seven-day range: 0.0024% – 0.0104%
- Positive periods in the window: 21 / 21
- Annualised: roughly 9.4%
So price fell nearly $4,600 over three days while the payment collected every 8 hours never missed a period and never flipped sign. Longs paying shorts has held since the start of August.
For reference, 0.03% / 8 hours is the level usually treated as a crowding warning for longs. The current reading is more than three times below it — funding is positive, but not so positive that a single cascade is likely to break it.
What it means for the positions here
In a position with matched notional on both legs, return comes only from funding and price direction cancels between the legs. So through this drawdown exactly one thing could have changed the return: whether funding turned negative. It did not.
To state it completely: funding drifting toward zero or turning negative in flat and bear markets is something this strategy genuinely runs into — the 2022 row in the performance table is exactly that, and it has not been hidden. It did not happen this time, which does not mean it will not happen next time.
What is worth watching next is the US employment and inflation data in early September, and whether spot ETF flows return. For funding specifically, open interest carries more information than price: price rebounding with open interest expanding, and price flat while leverage piles up on its own, are two completely different markets.
Sources: OI-weighted funding rates from CoinGlass, rate probabilities from CME FedWatch, and publicly reported liquidation and ETF flow figures, as of 29 August 2026.