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Analyst: Bitcoin funding rates have fallen to their lowest level since 2023, which may indicate that a bottom has formed

By: rootdata|2026/04/16 19:42:01
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CoinDesk analyst James Van Straten stated that the Bitcoin funding rate has fallen to its lowest level since 2023, and historical patterns show that such signals often coincide with market bottoms. According to Glassnode data, the seven-day moving average of the funding rate has dropped to about -0.005%.

The funding rate is the fee that long and short positions pay each other periodically in perpetual contracts to keep the contract price aligned 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 market. Despite the funding rate being persistently negative from March to April this year, Bitcoin still oscillated upward from the $60,000 to $65,000 range to about $75,000. Historically, a deeply negative funding rate often coincides with Bitcoin's phase bottoms: during the market crash triggered by the COVID-19 pandemic in March 2020, Bitcoin fell to about $3,000; it dropped to $30,000 during China's mining ban announcement in 2021; it hit a low of about $15,000 during the FTX collapse in November 2022; and it briefly fell below $20,000 during the Silicon Valley Bank crisis in 2023. During the yen arbitrage trade closure in August 2024 and the "Liberation Day" sell-off in April 2025, negative funding rates also appeared alongside phase lows. The continued negative funding rate indicates that even if the price trend is positive, short positions remain at a high level. This divergence may suggest that the market is climbing within a "wall of worry," and a large number of short positions could become fuel for further price increases.

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