Summary
- Bitcoin's seven-day average funding rate fell to about -0.005%%, the lowest level since 2023, according to the report.
- CoinDesk said extremely low funding rates have often coincided with bottoms in Bitcoin's price, and markets are watching for a similar bottom pattern this time.
- Even as Bitcoin rises, bearish bets and short positions still dominate, raising the possibility that liquidations could trigger further gains.
Forecast Trend Report by Period
Bitcoin's funding rate has fallen to its lowest level since 2023, fueling expectations that the cryptocurrency may be nearing a bottom.
CoinDesk, citing data from on-chain analytics firm Glassnode, reported on June 15 that Bitcoin's seven-day average funding rate recently dropped to about -0.005%. That is the lowest level since 2023. During the decline in funding rates, Bitcoin rose from the low-to-mid $60,000 range to around $75,000.
Funding rates are periodic payments exchanged between long and short traders in the perpetual futures market. A negative funding rate typically indicates that bearish bets are in the lead.
CoinDesk said extremely low funding rates have often coincided with bottoms in Bitcoin's price. The pattern generally reflects a heavy buildup in short positions, which can set off a sharp rally if those bearish bets are liquidated.
Funding rates previously plunged during the collapse of FTX in November 2022. They also moved into negative territory during the Silicon Valley Bank crisis in 2023, when Bitcoin rebounded after falling below $20,000.
Markets are now watching whether the pattern will repeat. Bitcoin has continued to rise, but funding rates suggest bearish bets still dominate. Those short positions could end up fueling a further gain in Bitcoin, CoinDesk reported.
JOON HYOUNG LEE
gilson@bloomingbit.ioCrypto Journalist based in Seoul
