Bitcoin funding rates turn most negative since 2023, signaling potential market bottom

Bitcoin funding rates have reached their most negative levels since 2023, a phenomenon that has historically coincided with local market bottoms. Despite this bearish signal, Bitcoin has continued to rise, nearing $75,000. Funding rates, which are payments between long and short traders in perpetual futures contracts, are currently around -0.005% on a seven-day moving average. Negative rates indicate that short traders are paying longs, suggesting a market leaning towards downside bets. However, this sustained negative funding, observed throughout March and April, has occurred as Bitcoin climbed from the mid-$60,000s to around $75,000. Historically, deeply negative funding rates have often preceded price recoveries, as crowded short positions can lead to short squeezes. Past instances include the March 2020 crash, the mid-2021 China mining ban, the FTX collapse in November 2022, the Silicon Valley Bank crisis in 2023, and more recent events like the yen carry trade unwind and the April 2025 selloff. The current divergence between negative funding rates and rising prices suggests the market is "climbing a wall of worry," with short positions potentially fueling further upside.

(Source：CoinDesk)