Berachain (BERA) has faced a significant drop in value recently, losing 30% amidst a bearish atmosphere in the market.

Over the last 24 hours, the token has seen a further decline of 6%, fueling concerns of a possible continued downturn. The growing negative sentiment surrounding the altcoin might persist in the short term.

BERA is confronted with increasing downside risks as short positions in its futures market have surged. The spike in demand for shorts is reflected in its negative funding rate which currently stands at -0.11% since the token's launch on February 6.

A negative funding rate implies that short traders are compensating long traders, indicating a strong preference for short positions. Prolonged negative funding rates suggest a prevailing bearish mood where traders are consistently betting on price drops, potentially leading to heightened price volatility and extended declines for BERA.

Moreover, significant outflows have been noted from BERA's spot markets recently, with nearly $2 million exiting today alone. Such outflows signal an increase in selling pressure, highlighting a bearish trend as investors either reduce exposure or take profits, leading to possible further price reductions.

Berachain currently trades at $6.14, hovering just above the $6.07 support level. A strengthening bearish sentiment may push its price below this support, possibly driving the token to trade as low as $5.35. Failure to defend this level could see BERA dropping to its all-time low of $4.74.

Conversely, if market sentiment shifts positively and demand for BERA surges, the token could rally towards $7.36.