Bitcoin’s funding rates have reached their most negative levels since 2023, a pattern historically associated with market lows, even as BTC continues its ascent through $75,000. According to data from Glassnode, the seven-day moving average for funding rates has fallen to approximately -0.005%. These rates represent periodic payments exchanged between long and short traders in perpetual futures contracts, aiming to align prices with the spot market. Positive rates indicate bullish positioning, where longs pay shorts; negative rates suggest bearish sentiment, as shorts compensate longs.
Despite a prolonged period of negative funding throughout March and April, bitcoin has steadily risen from lows in the $60,000s to approximately $75,000. Historically, deeply negative funding rates have often marked local price bottoms for bitcoin, usually reflecting crowded short positions that lead to upward squeezes when bearish bets are reversed.
This pattern has recurred across various market cycles. In March 2020, during the COVID-19 crash, bitcoin plummeted to about $3,000 with sharply negative funding rates. A similar situation arose in mid-2021 following China’s mining ban, pushing prices down to $30,000. The FTX collapse in November 2022 also saw extreme funding negativity as bitcoin bottomed near $15,000.
In 2023, the Silicon Valley Bank crisis triggered negative funding rates concurrent with bitcoin briefly falling below $20,000 before recovering. More recently, episodes like the yen carry trade unwind in August 2024 and the April 2025 “Liberation Day” selloff aligned negative funding with local lows.
The continuation of negative funding rates implies that bearish positioning remains high, despite rising prices, suggesting a market climbing a wall of worry. This scenario may set the stage for further upward movement as short positions are potentially unwound.