Funding rates are at their lowest since 2023. What does this mean for Bitcoin?
Imagine a market where almost everyone is betting on a drop.
And the price keeps going up.
That’s exactly what is happening with Bitcoin right now.
The most negative funding rates since 2023
Over the past few weeks, funding rates for Bitcoin have fallen to their lowest levels since 2023.
In practice, that means one thing:
The market is overloaded with short positions.
The funding rate is the mechanism that balances the perpetual futures market:
Positive rate → longs pay → bullish market
Negative rate → shorts pay → bearish sentiment
Right now, we are in a situation where most traders expect a decline, yet the price is moving higher.
The price is not following the crowd
Despite the heavy short positioning, Bitcoin is rising:
from $60,000
to around $75,000
This creates a clear divergence:
Negative sentiment
Rising price
And this is exactly where an opportunity starts to take shape.
History repeats itself
If we look back, we can see that this pattern is not new.
Every time funding rates become deeply negative, the market is often close to a local bottom:
- 2020 (COVID crash) → drop to ~$3K → followed by a strong recovery
- 2021 (China mining ban) → drop to ~$30K → recovery
- 2022 (FTX collapse) → bottom around ~$15K
- 2023 (Silicon Valley Bank) → drop below $20K → new uptrend
- 2024–2025 events → the same pattern once again
What all of these moments had in common was one thing:
Too many shorts exactly when the market was under pressure.
What is actually happening
When too many people bet on a decline:
- The market becomes overcrowded in one direction
- Even a small move up starts forcing positions to close
- That leads to a short squeeze
- The price accelerates even more
In other words:
Shorts become fuel for the rally.
The market is climbing the “wall of fear”
The current situation shows something important:
The market is not rising because everyone is bullish...
It is rising despite the fact that most people are bearish!
This is a classic scenario where the price moves higher against a backdrop of doubt and uncertainty.
The more skepticism there is in the market, the more potential there is for the move to continue.
What this means for you
This is not a guarantee that we have seen the absolute bottom.
But it is a signal that:
- the market is not overheated
- there is no mass euphoria
- there is built-up pressure in short positions
And most importantly:
the majority opinion is not always right.
If you are thinking about entering the market
Many people wait for the perfect moment.
The truth is, it rarely looks perfect in real time.
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When everyone is convinced the market will go lower, the conditions for a move in the opposite direction often start to build.
History shows that the best opportunities rarely appear in moments of confidence.
More often, they appear when the market is full of doubt.
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