Bitcoin (BTC) market sentiment turned easy, with Nasdaq futures, Nasdaq at Wall Street Technologies, trading 700 points lower. Risk aversion is driven by concerns that profitable Chinese artificial intelligence startup Deepseek could significantly challenge U.S. tech dominance.
Bitcoin perpetual futures funding rates, the periodic payments made between long and short positions in perpetual futures contracts, have reversed negative, according to data source Velo. This is a sign of more bearish sentiment in the market – traders are continuing short positions in anticipation of lower prices.
The leading cryptocurrency by market value has fallen more than 3% since early Asian hours, hitting lows of less than $98,000 at one point, according to Coindesk data. Futures linked to NASDAQ fell more than 3.5%, with NVIDIA, the bell for all things AI, down 10% in pre-market trading.
“Today’s sell-off comes after President Donald Trump last week gave the green light to a crypto policy task force that notably stopped short of confirming that the United States would establish a crypto reserve. Bitcoin Meanwhile, Chinese AI startup Deepseek appears to have spooked tech stocks as successes suggest it’s possible to build AI models that cost less than U.S. AI holders. , said Pet Kozyakov, co-founder and CEO of Mercuryo, in an email.
Historically, however, negative reversals in financing rates have tended to mark local price lows. Additionally, there is always the risk of a short squeeze – bears throwing in the towel and shorting their bets, putting upward pressure on prices. That said, the funding rate has closely reversed bearish, meaning it is too early to call short BTC a crowded trade.
