The cryptocurrency market has been showing signs of increased strain this week with several factors weighing heavily on sentiment: ongoing macroeconomic headwinds, persistently negative derivative funding rates, and declining altcoin momentum.

What Are Funding Rates Signaling?

Data from Coinglass shows a consistent trend of negative or near-zero funding rates across both centralized (CEX) and decentralized exchanges (DEX). Funding rates dropping below 0.005% are often interpreted as a bearish indicator, suggesting short positions are dominant and traders holding them are willing to pay a premium.

Looking at specific assets:

While these conditions could spark sudden reversals like short squeezes, the current prevalence of neutral-to-bearish rates points to a market lacking strong bullish conviction and potentially liquidity.

Related: Crypto Market Rebounds Tuesday; BTC Eyes $80k, SOL/ADA/DOGE Post Big Gains

How is Bitcoin Holding Up Technically?

Bitcoin now trades around $82,000.60, roughly 9% spike in the past 24 hours, but nearly 2% on the week. The top cryptocurrency, though, is battling resistance at its 20-day EMA ($82,213) and its RSI hovers at 36.45, indicating it’s approaching oversold conditions.

The recent plunge below $75,000—for the second time this week—came after Donald Trump’s 104% tariff on China took effect, rattling global markets. This policy escalation triggered a risk-off mood, affecting both equities and crypto assets.

Adding to the selling pressure, institutional flows have turned negative. The BlackRock iShares Bitcoin Trust (IBIT) offloaded 3,296 BTC, contributing to $326 million in net outflows across all US Bitcoin ETFs—marking the third-largest outflow since inception.

Altcoin Market Cap Signals Further Downside

The total crypto market cap excluding Bitcoin, currently at $883.64 billion, shows signs of entering a historically oversold zone, as seen in the Bollinger Bands and RSI indicators on the TradingView chart below. The RSI is sitting below 30, which often acts as a short-term bottoming signal.

Volume remains high, suggesting capitulation may be underway. The lower Bollinger Band is flattening while price hovers near its support, hinting at a potential bounce towards $997.59 billion.

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If the altcoin market fails to reclaim the midline (20-day SMA), further downside toward $850 billion or even $800 billion remains likely. On the flip side, a confirmed reversal could push the market cap back toward the $1 trillion resistance.