The price of bitcoin has increased by approximately 14% this month, marking its best monthly performance in a year. Many believe the price will soon exceed $80,000, a level not seen since January. However, the perpetual futures market is behaving differently, with funding rates currently below zero.
This has led to confusion among market participants, with some interpreting the divergence as a lack of confidence in bitcoin's recent performance. According to Markus Thielen, founder of 10x Research, the situation is driven by hedging activity from institutions, representing a structural change in the market. The funding rate is a gauge of market sentiment, and its current negative value suggests that short pressure is dominating the futures market.
Thielen identifies three sources for this short pressure: hedge fund redemptions, institutional trades, and bitcoin miners pivoting to artificial intelligence. These factors contribute to a negative funding rate, but they do not necessarily indicate a bearish sentiment towards bitcoin.