Bitcoin might have just hit bottom with its recent dip below $78,000, but history suggests that a reversal could be brewing based on funding rate trends. BTC is down by 22% from its all-time high of $109,000, making the entire crypto market suffer with it. The cumulative crypto market cap surged marginally on Wednesday morning, but it remains well short of the $3 trillion mark.

Data depicts that the average funding rate is on a decline on the four major crypto exchanges which might be an alarming situation for investors. Funding rates matter a lot in BTC perpetual futures as they can indicate when the market is overheating or about to nuke.

Bitcoin funding rate drops

As per a post shared by Axel Adler Jr, an analyst at Cryptoquant, the big four exchanges, Binance, ByBit, OKX, and Deribit flashed a negative funding rate. The metric barely stands above zero. He urged that in this cycle and in four in four similar instances, this setup ended with a price increase and once with a decline.

Data provided by Coinglass shows that Bitcoin Funding rates for perpetual swaps stand at 0.0026% on Binance and 0.0028% on OKX. The same rate is running at 0.0049% on Bybit. However, the accumulated funding rate is quite on the same level. It stood at 0.0045% on Binance, negative 0.0171% on OKX and 0.0015% on Bybit.

Funding rate is basically a fee that longs pay shorts or vice versa in perpetual futures. It keeps contract prices in line with BTC’s spot price. When it’s high, longs are in control but when it’s low, shorts are ruling the game.

On the four major exchanges – Binance, ByBit, OKX, and Deribit – the average funding rate has dropped into negative territory, currently, the metric is just above zero.

In this cycle, in four similar instances it ended with a price increase and once with a decline.

The… pic.twitter.com/vOzrWncoDM

— Axel 💎🙌 Adler Jr (@AxelAdlerJr) April 2, 2025

Above 0.01% means long traders are paying more to hold positions. If it’s too high like positive 0.375%, the market might be in bubble territory. High funding suggests bullish sentiment in the market and people are paying premiums to go long. But if it stays high for too long, it can trigger a market correction or liquidation cascade. 

Meanwhile, Negative funding means shorts are paying longs and this often signals bearish sentiment but could also set up a short squeeze.

Can Trump and the Fed unleash the next surge?

The analyst highlighted that the corporate sector is actively buying coins while spot market selling pressure remains minimal. On the other side, experienced investors have stopped selling and several on-chain metrics indicate a normalization of market conditions after the overheating phase.

He mentioned that the only issue is poor macroeconomic indicators that are blocking Bitcoin’s growth. A positive signal from the Fed and the Trump administration could renew the inflow of cash via ETFs. This can potentially trigger the start of a new rally.

Bitcoin price surged marginally over the last day, yet it is trading down by 17% in the past 60 days. BTC is trading at an average price of $84,646 as of press time. Its 24-hour trading volume is up 2% to stand at $27.8 billion.

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