The price of bitcoin has increased by approximately 14% this month, marking its best monthly performance in a year. However, the perpetual futures market is not reflecting this upward trend, with a funding rate that is currently below zero. According to Markus Thielen, the founder of 10x Research, this divergence is not a sign of a lack of confidence in bitcoin, but rather the result of hedging activity by institutions.
Thielen attributes the negative funding rate to three main factors: hedge fund redemptions, institutional trades, and the growing trend of bitcoin miners pivoting to artificial intelligence. These factors are driving the short pressure in the futures market, resulting in a negative funding rate.
Despite this, Thielen believes that the price of bitcoin could soon push past $80,000, a level not seen since January. The funding rate is an important indicator of market sentiment, and its current negative value is a sign of the structural changes taking place in the market, rather than a shift in sentiment. As the price of bitcoin continues to rise, it will be important to monitor the funding rate and its impact on the futures market.