Funding rates are periodic payments exchanged between traders holding long and short positions in perpetual futures contracts.
Bitcoin News
Bitcoin funding rates have fallen to their lowest levels since 2023, even as the asset's price has climbed steadily from the low-to-mid $60,000s to around $75,000 over March and April. The data comes from blockchain analytics firm Glassnode. On a seven-day moving average, rates have dropped to approximately -0.005%.
Funding rates are periodic payments exchanged between traders holding long and short positions in perpetual futures contracts. They are designed to keep the derivative price in line with the spot market. A negative rate means short traders pay long traders, reflecting a market where bearish bets outweigh bullish ones.
The current setup has appeared repeatedly at key turning points in Bitcoin's price history. In March 2020, funding rates turned sharply negative as Bitcoin fell to around $3,000 during the COVID-19 sell-off before recovering. A similar pattern emerged in mid-2021 during China's mining ban, when Bitcoin dropped to $30,000.
Funding rates reached their most extreme during the FTX collapse in November 2022, when Bitcoin bottomed near $15,000. They flipped negative again during the Silicon Valley Bank crisis in 2023, coinciding with Bitcoin briefly falling below $20,000 before rebounding. The yen carry trade unwind in August 2024 and the April 2025 "Liberation Day" sell-off each showed the same dynamic, with deeply negative funding aligning with local price lows.
Heavy short positioning of this kind can create conditions for a squeeze higher. As bearish bets are unwound, short sellers buying back positions can add upward price pressure. The persistence of negative funding alongside rising prices suggests the market may be advancing against significant skepticism.
Whether the pattern holds this time depends on how underlying conditions shift. Elevated short positioning can act as fuel for further upside if sentiment turns, but it does not guarantee a reversal on its own. Glassnode data will be closely watched in the coming weeks for signs that positioning is beginning to unwind.
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