Bitcoin funding rates have reached their most negative levels since 2023, a signal that has historically coincided with market lows, as BTC continues to climb up to $75,000.
On a seven-day moving average, funding rates have fallen to around -0.005%, according to Glassnode data.
Funding rates are periodic payments exchanged between long and short traders in perpetual futures contracts, designed to keep prices aligned with the underlying spot market. When the rate is positive, long traders pay short traders, reflecting bullish positioning. When the rate goes negative, shorts pay longs, indicating a market biased toward bearish bets.
Despite the current period of negative funding in March and April, bitcoin has continued to climb from the low to mid $60,000s to around $75,000.
Historically, deeply negative funding rates have often coincided with local dips in the Bitcoin price. This dynamic generally reflects crowded short positioning, which can create conditions for a move higher as bearish bets are unwound.
This trend has manifested itself over several market cycles. In March 2020, during the COVID-19 stock market crash, bitcoin fell to around $3,000 as funding rates turned sharply negative.
A similar pattern emerged in mid-2021, amid the mining ban in China, when prices dropped to $30,000. Funding rates also reached their most extreme level during the FTX collapse in November 2022, when bitcoin bottomed near $15,000.
The trend continued through 2023, when funding rates turned negative during the Silicon Valley Bank crisis, coinciding with bitcoin briefly falling below $20,000 before recovering. More recently, episodes such as the end of the Yen carry trade in August 2024 and the April 2025 “Liberation Day” sell-off have also seen negative funding align with local lows.
The persistence of negative funding rates suggests that bearish positioning remains high, even as price action tends to increase. This divergence may indicate that the market is climbing a wall of worry, with short positioning potentially fueling further upside.
