BlockBeats News, April 16th – CoinDesk analyst James Van Straten published an article stating that the Bitcoin funding rate has dropped to its lowest level since 2023, and historical patterns show that such a signal often coincides with the market bottom. According to Glassnode data, the seven-day moving average of the funding rate has dropped to around -0.005%. The funding rate is the fee that long and short positions in perpetual contracts regularly pay to each other to keep the contract price in line with the spot market. When the rate is positive, longs pay shorts, reflecting bullish market sentiment; when the rate is negative, shorts pay longs, indicating a bearish bias.
Despite the funding rate remaining negative from March to April this year, Bitcoin has still oscillated upwards from the $60,000 to $65,000 range to around $75,000. Historically, a deeply negative funding rate has often coincided with a phase-wise bottom in Bitcoin’s price: during the market crash triggered by the COVID-19 pandemic in March 2020, Bitcoin dropped to around $3,000; during China’s mining ban announcement in 2021, it fell to $30,000; during the FTX collapse in November 2022, it bottomed around $15,000; and during the Silicon Valley bank crisis in 2023, it briefly dropped below $20,000. In August 2024 during the yen carry trade unwinding and in April 2025 during the “Liberation Day” sell-off, a negative funding rate also coincided with phase-wise lows.
A persistently negative funding rate indicates that even as the price trend improves, short positions remain at relatively high levels. This deviation may signify that the market is climbing a “wall of worry,” and a large number of short positions could become the fuel to further drive the price upwards.
