Bitcoin Regains $75,000, but Negative Funding Rates Persist Amid Liquidation-Driven Distortion

Bitcoin (BTC) has reclaimed the $75,000 level, but futures funding rates remain negative, leaving the market split over how to read the move.

Cointelegraph reported on April 16 that Bitcoin fell below $75,000 early in the US stock trading session before rebounding. The swing triggered about $120 million in long liquidations, yet funding rates stayed in negative territory throughout.

A negative funding rate means short sellers are paying to hold their positions. Funding rates typically turn positive when bullish expectations strengthen, but the current market appears to reflect limited demand for leveraged long positions.

That said, the move is not easily read as a straightforward bearish signal. Funding rates have stayed negative for several days, but the pattern may reflect structural effects from liquidations rather than a broader shift in market sentiment.

About $365 million of Bitcoin short positions have been forcibly liquidated this week. With collateral behind those bearish bets reduced, traders opted to keep positions open instead of posting additional margin, contributing to what appears to be a distortion in funding rates.

Funding rates are also calculated every eight hours, limiting the actual cost burden even when short-term fluctuations look sharp. That makes the indicator less reliable on its own as a guide to market direction.

The macro backdrop is also influencing the market. Bitcoin has recently moved in line with the S&P 500. US stocks have climbed to record highs, but Bitcoin remains far below its peak of $126,200. Repeated failures to break above the $76,000 resistance level have also restrained bullish expectations in the derivatives market.

US economic data have sent mixed signals. The Fed said industrial production fell 0.5% in March from the previous month, while auto production declined 2.8%. At the same time, jobless claims rose by 31,000, adding to concerns about a slowing economy.

Even so, institutional demand has remained firm. US spot Bitcoin ETFs recorded about $921 million in net inflows over the past five days, and companies including MicroStrategy have continued to accumulate Bitcoin.

The options market has also shown limited demand for downside protection. Put option premiums remain below call option premiums, suggesting investors are not aggressively hedging against further declines.

Overall, the negative funding rate is being interpreted less as a sign of a broader bearish turn than as a short-term distortion caused by liquidations and changes in position structure.