Bitcoin Funding Rates Hit Lowest Level Since 2023, Hinting at Possible Market Bottom

The funding rates for Bitcoin have dropped to their lowest level since 2023, a trend that has historically signaled a market bottom, as the cryptocurrency continues to push past $75,000. According to data from Glassnode, the seven-day moving average of funding rates has fallen to around -0.005%. Funding rates represent the periodic payments between long and short traders in perpetual futures contracts, aiming to keep prices aligned with the spot market. A positive rate indicates bullish sentiment, with long traders paying short traders, while a negative rate suggests bearish sentiment, with short traders paying long traders. Despite the prolonged period of negative funding rates in March and April, bitcoin's price has continued to rise, climbing from the mid $60,000s to around $75,000. Historically, deeply negative funding rates have often aligned with local price bottoms, typically reflecting crowded short positioning that can lead to a price surge as bearish bets are unwound. This pattern has been observed across multiple market cycles, including the COVID-19 market crash in March 2020, China's mining ban in mid-2021, the FTX collapse in November 2022, and the Silicon Valley Bank crisis in 2023. More recently, negative funding rates have coincided with local lows during the yen carry trade unwind in August 2024 and the April 2025 'Liberation Day' selloff. The persistence of negative funding rates suggests that bearish sentiment remains high, even as the price continues to rise, indicating that the market may be experiencing a 'wall of worry' phenomenon, where short positioning could fuel further price growth.