Analyst: Bitcoin Funding Rate Drops to Lowest Level Since 2023, Signaling a Possible Bottom

BlockBeats News, April 16th, CoinDesk analyst James Van Straten wrote that the Bitcoin funding rate has dropped to the lowest level since 2023, and historical patterns show that such a signal often coincides with the market bottom. According to Glassnode data, the seven-day moving average funding rate has fallen to about -0.005%. The funding rate is the fee that longs and shorts pay to each other regularly in perpetual contracts to keep the contract price in line 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 stance.

Although the funding rate has remained negative from March to April this year, Bitcoin has still oscillated from the $60,000 to $65,000 range to around $75,000. Historically, a deeply negative funding rate often coincides with a phase-wise bottom in Bitcoin's price: during the March 2020 market crash triggered by the COVID-19 pandemic, Bitcoin fell to around $3,000; during China's mining ban announcement in 2021, it dropped to $30,000; during the November 2022 FTX collapse, it bottomed at around $15,000; and during the Silicon Valley Bank crisis in 2023, it briefly fell below $20,000. In August 2024 during the yen carry trade liquidation and in April 2025 during the "Liberation Day" sell-off, negative funding rates also synchronized with phase-wise lows.

A sustained negative funding rate indicates that even as the price trend improves, short positions remain at relatively high levels. This deviation may suggest that the market is climbing the "wall of worry," and a large number of short positions may become the fuel to drive the price further upwards.