The bitcoin price has seen a significant 14% increase this month, marking its best monthly performance in the past year. Despite this, the perpetual futures market is exhibiting a bearish trend, with funding rates currently below zero. However, according to 10x Research Founder Markus Thielen, this divergence can be attributed to the increasing participation of institutional players in the market, who are engaging in hedging activities. The negative funding rate, Thielen explains, represents a structural shift in the market driven by the growing involvement of sophisticated investors.
This shift has resulted in a funding rate that is 13 percentage points below the historical norm, with the 30-day average funding rate standing at negative 5%. Thielen identifies three key sources of short pressure in the futures market: hedge fund redemptions, institutional trades aimed at capturing yields on preferred shares, and bitcoin miners pivoting to artificial intelligence. In each of these cases, the shorting of bitcoin futures is a mechanical risk-management strategy rather than an outright bearish bet on the cryptocurrency's price.