For the first time in 2025, Bitcoin's long-term financing rate has turned negative, and this development could indicate a local price bottom, according to analysts.
Bitcoin funding rates turn negative for a moment, indicating a possible local bottom
Data from Glassnode shows that the funding rate fell to -0.001% on Thursday, marking a rare event in the ongoing bull market.
Bitcoin (BTC) has been stuck in a volatile trading range between $90,000 and $100,000 since mid-November.
Sentiment among investors tends to turn bullish as Bitcoin approaches the upper end of this range, while bearish sentiment prevails as the price approaches the lower end.
“Bitcoin usually moves where the biggest pain occurs,” said market analyst Van Straten, referring to the current range-bound price action.
Derivatives, including futures and options, contribute to Bitcoin price fluctuations, although they represent only a small portion of the market's total value.
A key metric, the perpetual futures rate, measures the periodic payments between long and short positions in perpetual futures contracts.
Positive Funding Rate: Long positions pay off short positions, usually seen in bull markets.
Negative funding rate: Short positions pay off long positions, usually seen in bearish situations.
During supportive times, funding levels will be very positive as investors bet on a continued rise in prices.
However, when the market is overheated, corrective and liquidation measures often follow. On the other hand, in bearish conditions, negative funding rates can trigger a sharp recovery as premiums form and traders rush to close their positions.
Mark on a Local coin?
On Thursday, the Bitcoin financing rate briefly turned negative at -0.001%, triggering a leverage run and a sentiment move that pushed prices back above $94,000.
While this negative rate is mild compared to historical events such as the COVID-19 disaster in March 2020, where funding levels reached -0.309%, it still highlights the potential for a local coin.
“Negative funding rates do not guarantee immediate price recovery, but are worth monitoring along with technical indicators to gauge market sentiment,” Van Straten said.
Historical data supports this view, with short-term negative funding levels coinciding with price levels during major market events such as the Silicon Valley Bank collapse in 2023 and another downturn in 2024, each followed by significant price recovery.
* This is not investment advice.
Source: https://en.bitcoinsistemi.com/funding-turned-negative-in-bitcoin-have-bottom-levels-been-seen-here-are-the-details/
