sandmark.com
$BERA, the native gas and staking token of Layer 1 platform Berachain, rallied sharply in the days following its 6 Feb token unlock, surprising traders who had positioned for weakness.
The unlock was large, the initial reaction was negative, and nothing in the tape suggested a breakout was building.
Yet, the price reversed and moved more than 100% off the lows. To understand why, it helps to separate the move into three parts: the unlock itself, the Nova refund clause, and the derivatives positioning that amplified the reversal.
New unlock, same reaction
On 6 Feb, $BERA’s circulating market cap increased by roughly $29mn, equivalent to about 53% of its circulating market cap. The increase came from the release of 55.7mn tokens allocated to early investors, contributors, and ecosystem pools.
The initial reaction was in line with expectations for a supply event of that size. Price traded down more than 10% in the early hours following the release, hitting a low near $0.33 as newly unlocked tokens entered the market.
That first flush looked orderly. If selling had continued, the move would have resembled previous unlock-driven repricings across other assets.
But the decline stopped. Over the next two days, $BERA reversed sharply and reached levels near $0.71, a 127% low-to-high swing. The candle structure showed heavy intraday back-and-forth, not a one-sided breakout.
That shift, combined with the derivatives data around the event, is where the picture becomes clearer.
The Nova Refund clause
The other source of concern heading into the unlock was investor Nova Digital's refund rights.
The agreement included an Investor Refund Right exercisable for 12 months after the TGE. Since the TGE occurred on 6 Feb 2025, the right lapsed on the same day this year.
The clause did not specify TVL thresholds or a fixed dollar trigger. It was simply a time-bound option that, if exercised, could have introduced additional liquidity needs or signaled dissatisfaction from a key investor.
As the deadline passed without public confirmation of exercise, that perceived risk faded. This did not create new demand, but it removed a known overhead variable.
The mechanics of the repricing
The derivatives data around the event created the conditions for the move.
The most extreme funding print did not occur on the unlock day itself, but on 9 Feb, when the aggregated 1-day funding rate fell to −4.46% or roughly −1,628% annualized.
That was the most negative print in the dataset. An extreme rate like that reflects highly concentrated short exposure, not routine hedging. It suggests that traders leaned aggressively short in the days following the unlock, rather than capitulating immediately.
Open interest dropped on 6 Feb, which fits the early flush narrative; some traders reduced exposure as the price moved lower.
However, from 7 Feb to Feb 12, open interest expanded from roughly $24mn to a peak of $115mn. Price recovered during the same window, yet funding did not revert. Funding stayed between -2-3% daily, even as open interest and price both trended higher.
Normally, a rising price with rising leverage pushes funding positive because long positions dominate. Here it did not. That suggests traders continued to lean short into strength, or at least that short exposure remained structurally heavy.
The largest liquidation cluster arrived on 11-12 Feb. Notably, this occurred during an expansion in open interest rather than a collapse. That pattern suggests traders were aggressively re-entering positions rather than exiting.
In other words, the squeeze did not develop because traders gave up early. It developed because shorts continued to add or maintain exposure even as the market moved against them.
How the pieces fit together
The unlock created supply and produced a predictable first leg down. The Nova refund clause expired without drama, removing a known overhang.
The derivatives setup was crowded, with record negative funding, rising open interest, and traders maintaining short exposure into a rebounding market. Once the initial breakdown failed, those conditions produced a forced repricing.
This was not a clean bullish breakout or a shift in long-term sentiment. It was leverage-driven price formation in a market where supply was absorbed, and shorts were simply on the wrong side of the tape.