Bitcoin funding rate remains negative as BTC trades above $75,000

Bitcoin sold off in early trading hours at the US stock market open, briefly losing the $75,000 level before rebounding. The abrupt move triggered $120 million in liquidations of leveraged long (buy) BTC futures positions. Despite the volatility, Bitcoin’s funding rate has remained negative, a condition that can signal limited demand for bullish leverage.

Negative funding rate reflects liquidations rather than bullish conviction

The perpetual contract funding rate has been negative since Monday, indicating that shorts are paying to keep their positions open. Under neutral conditions, the indicator is expected to range between 5% and 10% to compensate for the cost of capital and exchange risks. While a 20% funding rate can appear to show strong conviction, the article notes that temporary spikes—positive or negative—are typically not a major concern for most traders.

Funding rates are calculated every 8 hours on most exchanges. The piece estimates that a 20% rate corresponds to roughly a 0.05% daily fee, meaning that even with high leverage (such as 20x), the cost would be about 1% unless the situation persists for a longer period.

It also points to the scale of forced deleveraging: Bitcoin bearish positions have been liquidated for $365 million since Monday. That process has reduced collateral supporting short positions, and the article argues that the negative funding rate is more consistent with losses from bears than with renewed conviction among bulls.

Bitcoin’s moves track equities, while US data supports risk assets

Bitcoin’s intraday trading has largely mirrored the S&P 500 over the past couple of weeks. The US stock market reached an all-time high on Thursday, while Bitcoin remains below its $126,200 peak. The article cites repeated failures to reclaim the $76,000 level as a factor behind subdued enthusiasm in Bitcoin derivatives markets.

At the same time, the latest US economic data was described as supportive for risk markets, including Bitcoin. Federal Reserve data released on Thursday showed that US industrial production fell 0.5% in March from the previous month. Consumer durable goods were the negative highlight, with automotive production down 2.8%. Continuing jobless claims rose by 31,000 to 1.818 million for the week ended April 4.

Options and spot flows offer no clear sign of heavy downside hedging

The article says Bitcoin options pricing does not show signs of excessive demand for downside protection. On Deribit, the premium paid on put options has lagged behind the premium on equivalent call options over the past week.

It also highlights spot-market inflows: $921 million in net inflows into US-listed Bitcoin spot ETFs over five days, alongside continued accumulation from Strategy (MSTR US), which the article says has supported investor confidence.

Implications for the market

At the time of writing, the article concludes that Bitcoin’s negative funding rate does not raise immediate alarms, particularly given continued strength in institutional demand within Bitcoin spot markets.