Bitcoin funding rates have hit their most negative levels since 2023, a signal that has historically coincided with market bottoms, as BTC continues to push higher through $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 in line with the underlying spot market. When the rate is positive, long traders pay short traders, reflecting bullish positioning. When the rate turns negative, shorts pay longs, indicating a market skewed toward downside bets.
Despite the current sustained stretch of negative funding through March and April, bitcoin has continued to grind higher, climbing from the low-to-mid $60,000s to around $75,000.
Historically, deeply negative funding rates have often coincided with local bottoms in bitcoin’s price. This dynamic typically reflects crowded short positioning, which can create the conditions for a squeeze higher when bearish bets settle.
This pattern has played out across multiple market cycles. In March 2020, during the COVID-19-induced market crash, bitcoin fell to around $3,000 as funding rates turned sharply negative.
A similar setup appeared in mid-2021 amid China’s mining ban, when prices fell to $30,000. Funding rates were also at their most extreme during the November 2022 FTX collapse, when bitcoin bottomed out near $15,000.
The trend continued into 2023, when funding rates turned negative during the Silicon Valley Bank crisis, coinciding with bitcoin briefly dipping below $20,000 before recovering. More recently, episodes such as the August 2024 yen carry trade and the April 2025 “Liberation Day” sell-off revealed that negative financing also aligned with local lows.
The persistence of negative funding rates suggests that bearish positioning remains elevated even as price action picks up. This divergence may indicate that the market is climbing a wall of concern, with short positioning potentially fueling further upside.
