Bitcoin may be entering a familiar but often misunderstood stage of the market cycle. Even as price action shows resilience, derivatives positioning tells a different story, with funding rates remaining bearish and suggesting many traders are still positioned defensively or betting against sustained upside. Comparing Current Conditions To Previous Bitcoin Recoveries Bitcoin has now entered a disbelief phase as funding rates stay bearish. Analyst Darkfost has highlighted on X that funding rates have remained negative even as the BTC price continues to move higher. Related Reading: Bitcoin Rally Catches Shorts Offside—$200M Liquidated As Price Hits $79,000 Meanwhile, this BTC chart offers a different perspective from what is usually observed. It shows the 30-day cumulative evolution of the funding rates on Binance, offering a clearer view of when funding rates entered a sustained negative trend. The indicator currently sits around -4.5%, underscoring how aggressively traders have continued betting against the market in recent months. For comparison, when BTC began emerging from the bear market in late 2022, funding rates on Binance fell even further, reaching nearly -7% on a 30-day sun basis. Whenever such a strong consensus formed, it would help create a bottom and fuel the rally that was beginning to develop. According to Darkfost, despite the market entering a phase of disbelief, traders still prefer to fight the trend rather than follow it. A trader known as Max Traders on X has also noted that Bitcoin funding rates haven’t been this negative in a long while. Historically, such extremes typically emerge when the market crowd is heavily positioned to one side. Despite BTC’s recent strength, many participants are positioning for a reversal, even as price action continues to suggest a strong short bias. However, this kind of crowded positioning often creates the opposite conditions for moves in that direction. Thus, if BTC price manages to maintain its current levels or push higher, the buildup of short positions could trigger a squeeze that would accelerate the move upward. The Conditions That Could Lead To A Bitcoin Reversal Bitcoin’s recent upside has been largely driven by institutional spot buying pressure over the last few weeks, with each major move higher supported by strong inflows visible in spot volume data. Crypto trader CGT Trader explained that the Coinbase Premium Index has also confirmed the same trend, which recorded a significant spike in institutional demand at the recent local top. Related Reading: Bitcoin Rebounds Strongly — Can Bulls Drive Price Toward $79,000 Since then, the BTC price has continued to grind higher, but the institutional spot buying has failed to make a new high. This creates a growing divergence that suggests a potential reversal. However, if this downtrend continues and large players start selling, the move could be retraced much faster than the recent upward rally. Featured image from Getty Images, chart from Tradingview.com
Data shows the Bitcoin Funding Rates have turned negative across exchanges recently, indicating bearish bets are currently dominating. Aggregated Bitcoin Funding Rates Have Plunged As pointed out by analytics firm Santiment in a new post on X, the aggregated Bitcoin Funding Rates are currently showcasing a significant short bias. The “Funding Rate” here refers to an indicator that keeps track of the amount of periodic fees that derivatives market traders are exchanging between each other on a given centralized exchange. Related Reading: Bitcoin SOPR Ratio Shows Early Capitulation—But Not Full Bottom Yet When the value of this metric is positive, it means the long contract holders are paying a premium to the short contract holders in order to hold onto their position. Such a trend can be a sign that a bullish sentiment is dominant on the platform. On the other hand, the indicator being under the zero mark implies a bearish mentality may be held by the majority of traders, as shorts are outpacing the longs on the exchange. Now, here is the chart shared by Santiment that shows the trend in the aggregated Bitcoin Funding Rates across all exchanges: As displayed in the above graph, the Bitcoin Funding Rates across exchanges have witnessed a notable negative spike recently, implying demand for short positions has gone up. “Traders are showing clear concern over fear of an escalating war, as well as expressing frustration toward the lack of progress on the Clarity Act,” noted the analytics firm. The rise of bearish sentiment may not actually be bad for the cryptocurrency, however, if history is anything to go by, the asset’s price often tends to go against the crowd opinion. In terms of the derivatives market, this contrarian effect can emerge due to liquidations feeding into the opposite type of price move. “Historically, extreme shorting increases the likelihood of cryptocurrencies bouncing due to potential short liquidations providing a boost whenever prices break through resistance levels,” explained Santiment. Related Reading: XRP Investors In Pain: $50 Billion Worth Of Supply Now In Loss While either side of the market can fall prey to liquidations depending on random volatility, the side that’s more dominant is usually the one more likely to be affected by a mass cascade. For Bitcoin, that side is the short one at the moment. It now remains to be seen how the asset will develop in the coming days, given the bearish sentiment. BTC Price The effect of the negative Funding Rates may already be in motion as the asset has seen a bounce back above the $70,000 level during the past day. The upward move has caused short liquidations of more than $100 million, as the heatmap from CoinGlass suggests. Looks like BTC has seen the highest amount of liquidations over the last 24 hours | Source: CoinGlass Featured image from Dall-E, chart from TradingView.com
Analytics firm Glassnode has highlighted how the Bitcoin Funding Rates have increased across the various exchanges, but still not to a high degree. Bitcoin Perps Funding Rates Have Surged In a new post on X, Glassnode has talked about the latest trend in the Bitcoin Funding Rates for the major perpetual futures markets. The “Funding Rate” is an indicator that measures the amount of periodic fees that traders on the futures market are exchanging between each other on a given derivatives platform. Related Reading: Bitcoin Accumulation: Data Shows Institutions Are Net Buyers Again When the value of this metric is positive, it means the long holders are paying a premium to the shorts in order to hold onto their position. Such a trend implies a bullish mentality is dominant in the market. On the other hand, the indicator being below the zero mark suggests the shorts outweigh the longs and a bearish sentiment is shared by the majority of traders on the exchange. Now, here is the chart shared by Glassnode that shows the trend in the 7-day moving average (MA) of the Bitcoin Funding Rate for major exchanges over the last couple of years: As displayed in the above graph, the Bitcoin Funding Rate has witnessed an increase across these platforms recently, indicating that investors have been setting up fresh bullish positions. The mean Funding Rate for these exchanges dropped to the 0% mark back in November as the cryptocurrency’s price went through a crash. As the asset settled into its consolidation phase, investors gradually set up longs, culminating in the indicator recovering to 0.005%. Related Reading: Bitcoin Miner Capitulation Ends: Hash Ribbons Flash Buy Signal In the last 24 hours, however, the mean Funding Rate has retraced back to 0.003%, implying some investors have closed up their long positions after the latest recovery rally and/or others have set up shorts to bet against the bullish price action. In the past, major rallies have tended to occur alongside notable positive Funding Rates on the different exchanges. According to Glassnode, the threshold has generally lied at 0.001%. Since the mean Funding Rate is still below this level, the analytics firm has noted, “current conditions remain supportive but not yet decisive.” BTC Broke Above $94,000 Before Retracing Down Bitcoin has seen the renewal of bullish momentum recently, with its price recovering as high as $94,700, but the past day has seen a setback for the digital asset as it’s now back at $92,100. Other cryptocurrencies have also been volatile to varying degrees in the past day, which has resulted in liquidations of over $500 million on the derivatives exchanges, as data from CoinGlass shows. Out of these $503 million in liquidations, about $146 million of the positions involved were Bitcoin-related ones. Featured image from Dall-E, CoinGlass.com, Glassnode.com, chart from TradingView.com
Bitcoin is stuck in a tight consolidation after its sharp rejection from the $100,000 region, with price compressing into a narrow range that reflects growing market tension. As momentum builds beneath the surface, attention is focused on a decisive breakout or breakdown that could define Bitcoin’s next major move. Bitcoin Trapped In Post-Breakdown Compression According to analyst CyrilXBT, Bitcoin remains mired in a period of intense price compression following its significant breakdown from the $100,000 threshold. This cooling-off phase reflects the market’s attempt to stabilize after being rejected at a historic milestone, resulting in a loss of immediate upward momentum. Related Reading: Bitcoin Hovering In A Descending Range, But Alts Are Quietly Gaining Momentum The current technical structure is defined by a series of lower highs, which are effectively squeezing the price into an increasingly narrow corridor. This tightening action is concentrated around the $88,000 to $90,000 range. It creates a high-pressure environment where the asset is searching for its next definitive directional catalyst. CyrilXBT characterizes this current behavior as “classic post-distribution chop,” a phase typically followed by a period where large holders exit positions, leading to erratic sideways movement. It also serves as a necessary reset before a new trend can be established. Looking forward, the market is approaching a period of increased volatility that could resolve in two ways. Bitcoin will either stage a bullish breakout through the descending trendline or undergo a final “flush” to the downside, wiping out over-leveraged long positions. Ultimately, this consolidation serves as a strategic battleground to determine which market participants will be shaken out before the next major move. Price Compression Signals A Bigger Move Ahead In a market assessment, Daan Crypto Trades observed that despite the ongoing sideways movement, Bitcoin’s underlying market health remains stable. Specifically, both the BTC funding rates and the spot premium have held their ground, suggesting that the current chop hasn’t yet led to the massive de-leveraging or sentiment shifts often seen during volatile corrections. Related Reading: Bitcoin Price Remains Stuck Inside This Range, But A Breakout Could Follow As Bitcoin remains compressed within this range, a major volatility expansion is highly likely. Based on current trends, a decisive move is expected to materialize within the next one to two weeks as the market reaches a breaking point in its consolidation. The primary recommendation during this uncertain phase is to exercise patience and wait for a confirmed breakout rather than attempting to trade every minor fluctuation. By avoiding the temptation to over-leverage in the middle of this range, traders can protect their capital and wait for clear confirmation of the next trend. Featured image from Getty Images, chart from Tradingview.com
As political tensions between US President Donald Trump and Elon Musk escalated yesterday, the Bitcoin (BTC) market experienced a sharp shift in sentiment, with the funding rate on Binance flipping from positive to negative within hours. Bitcoin Funding Rates Turn Negative On Binance According to a CryptoQuant Quicktake post by contributor Darkfost, BTC funding rates on Binance have once again turned negative, even as the top cryptocurrency continues to trade above the $100,000 mark at the time of writing. Related Reading: Bitcoin Upward Momentum ‘Highly Likely’ To Continue, On-Chain Data Shows The analyst attributed the sudden reversal in funding – from +0.003 to -0.004 – to the public spat between Trump and Musk on social media. This rapid shift reflects growing fear among market participants amid heightened uncertainty. Following the sentiment shift, BTC fell from the mid-$100,000 range to a low of $100,984, according to CoinGecko. Over the past two weeks, the asset has declined by 4.1%. That said, the current dip may offer a prime buying opportunity to investors. If Bitcoin rebounds strongly, it could result in a strong resurgence in buying pressure, leading to a short squeeze that may propel BTC’s price further up. Darkfost highlighted that there have been three instances during the current market cycle when BTC witnessed such deep negative funding. Notably, each of these instances were followed by a strong upward move in the cryptocurrency. For example, on October 16, 2023, BTC dipped into negative funding territory before rallying from $28,000 to $73,000. A similar pattern played out on September 9, 2024, when the asset surged from $57,000 to $108,000. The most recent case was on May 2, 2025, when BTC jumped from $97,000 to a new all-time high (ATH) of $111,000. If history repeats, then the market may see a new ATH for BTC in the coming weeks. Darkfost noted: Such extreme readings often mark moments of maximum pessimism, precisely the kind of sentiment that can precede a strong bullish reversal when the short term negativity is gone. Large Investors Increase BTC Exposure Meanwhile, Bitcoin whales – wallets holding large amounts of BTC – continue to accumulate at a rapid pace. Notably, new whales have acquired BTC worth $63 billion, reflecting strong confidence in the asset’s near-term prospects. Related Reading: Bitcoin Hash Ribbons Indicating Prime Buying Opportunity, Analyst Says Supporting this bullish outlook, recent analysis by QCR Capital indicates that large investors expect BTC to surge to as high as $130,000 by the end of Q3 2025. Additionally, the realized cap held by long-term holders has surpassed $20 billion, reinforcing positive sentiment. That said, some analysts urge caution, expecting BTC to crash below $100,000 before resuming its bullish momentum. At press time, BTC trades at $104,069, down 0.5% in the past 24 hours. Featured image from Unsplash, charts from CryptoQuant and TradingView.com
As Bitcoin (BTC) continues to hover near its all-time high (ATH) of $111,814, signs of a reset in the derivatives market are emerging. One such indicator is the Binance Liquidation Delta, which is showing a consistent pattern of large-scale long position liquidations. Bitcoin Late-Long Positions Get Wiped Out According to a recent CryptoQuant Quicktake post by analyst Amr Taha, Binance’s BTC derivatives market is currently experiencing a significant reset. The Binance Liquidation Delta reveals that liquidations of long positions, sometimes exceeding $40 million, are repeatedly disrupting the market. Related Reading: Bitcoin Selling Pressure Weak As Binance Inflows Stay Subdued – Can BTC Sustain Its Rally? For the uninitiated, the Binance Liquidation Delta measures the difference between long and short liquidations on Binance’s futures market. A negative delta means more long positions are being forcibly closed, often indicating bearish pressure or a leverage reset. On the contrary, a positive delta suggests more short positions are getting liquidated, which can signal a bullish short squeeze. The following chart highlights repeated spikes in long liquidations – shown in green – occurring at hourly intervals. While some short liquidations are also present, they are far less significant in magnitude. Taha noted a key detail that despite the consistent flushing of long positions, funding rates on Binance remain neutral, hovering around zero. This indicates a lack of extreme sentiment – neither overly bullish nor bearish – implying that traders are cautiously reassessing their positions rather than panicking. In parallel, whale activity signals accumulation rather than capitulation. Most notably, Bitfinex saw its largest single-day BTC withdrawal since August 2019, as 20,000 BTC was pulled from the exchange. Taha commented: This transaction, valued at over $1.3 billion based on current prices, indicates that such large-scale withdrawals often reflect long-term holding strategies, thereby alleviating immediate selling pressure on exchanges. Considering the neutral funding environment, persistent long liquidations, and substantial whale outflows, the analyst suggested that Bitcoin may be positioning for another upward move – potentially to a new ATH. New ATH On The Horizon For BTC? At the time of writing, BTC is trading 5.8% below its ATH. However, several technical and on-chain indicators hint at further upside for the world’s largest digital asset by market cap. Related Reading: Bitcoin Surges With Low Retail Interest – Is A Second Wave Coming? For instance, CryptoQuant contributor ibrahimcosar recently projected a price target of $112,000 following a bullish double bottom breakout. Additionally, Coinbase recently recorded a 7,883 BTC withdrawal, suggesting that institutional investors may be positioning for the next leg up. That said, some warning signs persist. For example, recent on-chain data shows that long-term BTC holders are reducing their exposure to the digital asset, likely in anticipation of a price correction. At press time, BTC trades at $105,308, up 1.4% in the past 24 hours. Featured image from Unsplash, charts from CryptoQuant and TradingView.com
Bitcoin’s recovery continues to show momentum, with the asset currently trading at $94,288 after gaining 1.6% over the past 24 hours. The price has now risen nearly 15% over the past two weeks, reversing a previous correction phase and pushing BTC closer to retesting the $100,000 price mark. Amid the price performance, recent market analysis points to diverging signals between BTC’s funding rate behavior and growing confidence among US-based investors. Related Reading: Bitcoin Whales Back In ‘Full Force’ For The Rally, Glassnode Reveals Bitcoin Funding Rates Drop Despite Rising Prices According to Nino, an analyst from CryptoQuant, the Bitcoin funding rate—typically used to gauge sentiment in the perpetual futures BTC market has again dipped into negative territory, even as whale accumulation continues on major exchanges like Binance and Coinbase. Nino particularly identified a notable development in Bitcoin’s derivatives market. The 72-hour average of BTC funding rates, including moving average indicators (MA, EMA, WMA), has entered negative territory for the fourth time this year. Funding rates refer to periodic payments made between long and short positions on perpetual futures contracts, with negative rates meaning short positions are paying long positions. This generally reflects that the market is either positioning defensively or becoming cautious at current price levels. What makes this instance notable is that previous dips into negative funding rates occurred at lower price levels, whereas the current shift has taken place above $94,000. Nino suggests this may point to potential market exhaustion or a phase of profit-taking, where short traders are more active despite upward price movement. If volatility increases and funding rates remain suppressed, a spike in liquidations could follow, especially if open interest in leveraged positions expands rapidly. Coinbase Premium and Whale Behavior Reflect US Investor Activity In a separate analysis, CryptoQuant analyst Crypto Dan noted a trend reversal beginning around April 21, accompanied by renewed buying from large holders, or “whales.” Notably, these purchases were first identified on Binance and were soon followed by similar activity on Coinbase. According to Dan, this pattern may indicate rising confidence among US-based investors and growing participation from institutions or high-net-worth individuals. One supporting metric is the Coinbase premium, which tracks the price difference between BTC on Coinbase and other global exchanges. A positive premium typically reflects stronger demand from US investors. Related Reading: Bitcoin Metrics on Binance Show Shift That Could Precede Market Squeeze As of now, this premium remains in positive territory, suggesting that US market participants are contributing to BTC’s recent momentum. Dan concludes that the current phase may signal more than a typical price rebound and could represent a broader shift in market structure, driven by renewed capital inflows and institutional positioning. Featured image created with DALL-E, Chart from TradingView
Recent declines in Bitcoin’s price have been followed by negative sentiment across several on-chain metrics that are crucial in determining its next trajectory. With key metrics witnessing a decrease, there are speculations that the flagship asset might see an extended drop in its price. Market Sentiment Shifting As Bitcoin Funding Rates Drops As the market […]
Van Eck says BTC can reach a price of $180,000 this cycle but warned that elevated funding rates could be showing early signs of "overheating."
Data shows the Bitcoin funding rates on exchanges have turned negative, a sign that the shorts have now become the dominant force in the market. Bitcoin Funding Rates Have Turned Negative After Market Crash As pointed out by an analyst in a CryptoQuant Quicktake post, the Bitcoin funding rates have seen a sharp decline recently. The “funding rate” refers to a metric that keeps track of the periodic fee that derivatives contract holders are currently exchanging with each other. When the value of this indicator is positive, it means the long investors are paying a premium to the short ones in order to hold onto their positions. Such a trend implies a bullish sentiment is shared by the majority in the sector. Related Reading: Chainlink (LINK) Recovers 20% As Network Lights Up With Activity On the other hand, the metric being negative implies a bearish mentality could be the dominant one in the market as the short holders outweigh the longs. Now, here is a chart that shows the trend in this Bitcoin indicator for all exchanges over the past few months: As displayed in the above graph, the Bitcoin funding rate had been positive throughout the year 2024, save for a couple of small dips into the negative region, until this latest crash, which finally took the indicator to notable red values. The earlier positive values were naturally due to the fact that the market had a bullish atmosphere to it, so the average investor was trying to bet on the price to rise. From the graph, it’s visible that this positive sentiment was the strongest during the rally to the all-time high (ATH) price fueled by the spot exchange-traded fund (ETF) demand. During the consolidation period that had followed this rally, BTC had seen a couple of notable drawdowns, but they weren’t enough to shake off the bullish mood. The recent sharp crash, though, appears to have finally caused investors to have a bearish outlook on the cryptocurrency. The Bitcoin crash had resulted in a huge amount of long liquidations in the market, triggering what’s known as a squeeze. In a squeeze event, a sharp swing in the price causes mass liquidations, which in turn fuels the price move further. This then unleashes a cascade of more liquidations. Since the latest such event involved the longs, it would be called a long squeeze. In general, an event of this kind is more likely to affect the side of the derivatives market that is more dominant. As this power balance has shifted towards the shorts now, it’s possible that the market could instead see a short squeeze in the near future. Related Reading: Is Bitcoin In A Bear Market Now? Here’s What On-Chain Data Suggests Naturally, it’s not necessary that a short squeeze should take place, but if the price ends up witnessing some volatility, it’s possible it may end up punishing the short-heavy market. BTC Price Bitcoin has been steadily making recovery from the crash as its price has now climbed back to $57,500. Featured image from Dall-E, CryptoQuant.com, chart from TradingView.com