Bitcoin Financing rates have reached their lowest levels since 2023, a signal that has historically coincided with a market bottom as BTC continued its push towards $75,000.
According to data from Glassnode, financing rates have dropped to around -0.005% based on the 7-day moving average.
Funding rates are periodic payments exchanged between long and short traders of a perpetual futures contract to keep prices in line with the underlying spot market. When interest rates are positive, long traders pay short traders, reflecting a bullish position. When interest rates turn negative, shorts pay longs, indicating a market bias toward downside bets.
Despite the current persistence of negative funding throughout March and April, Bitcoin has continued to move higher, climbing from a low of $60,000 to around $75,000.
Historically, deeply negative funding rates have tended to coincide with local bottoms in Bitcoin prices. This dynamic often reflects crowding in short positions, which could set the stage for a squeeze higher when bearish bets unwind.
This pattern has manifested itself across multiple market cycles. In March 2020, during the COVID-19-induced market crash, Bitcoin fell to around $3,000 as funding rates turned sharply negative.
A similar situation occurred during China’s mining ban in mid-2021, when prices fell to $30,000. Funding rates were also at their most extreme during the FTX crash in November 2022, when Bitcoin bottomed near $15,000.
This trend continued into 2023, when funding rates turned negative during the Silicon Valley banking crisis, coinciding with Bitcoin briefly falling below $20,000 before recovering. More recently, events such as the yen carry trade unwinding in August 2024 and the “Liberation Day” selling in April 2025 have also resulted in negative financing consistent with local lows.
The persistence of negative funding rates suggests that bearish positioning remains elevated despite price action trending higher. This divergence could be a sign that the market is climbing a wall of worry, and short positions could serve as fuel for further gains.
