The price of Bitcoin faced resistance at the $80,000 level, with perpetual futures funding rates turning slightly negative and reaching -2% on an annual basis. This movement in funding rates indicates an increase in market uncertainty and shows that investors are searching for direction.

The funding rate set for perpetual futures contracts maintains the cost balance between long and short positions. Positive funding rates signal bull markets where long positions pay shorts, while negative rates indicate the opposite and usually align with downward trends. Over the past two weeks, funding rates have been oscillating between positive and negative, revealing market indecision.

SIGNALING A BOTTOM FORMATION

According to Glassnode data, the daily funding rate dropped to -0.006%, reaching -2% on an annual basis. This is considered a significant indicator approaching a turning point in Bitcoin’s price movements. Historically, during major downturns such as the Covid-19 crisis, the FTX crash, and China’s mining ban in 2021, sustained negative funding rates have signaled bottom formations for Bitcoin.

INVESTOR SEARCH FOR DIRECTION CONTINUES

However, currently, a dynamic is observed that prevents negative funding rates in Bitcoin from persisting for a long time. Each wave of price increase over the past two weeks has led investors to rapidly change their positions. Long positions opened during price surges were largely liquidated when the price reversed, making it challenging for funding rates to sustainably remain in the negative territory. With Bitcoin losing its 200-day moving average, investors continue their search for direction in the market. The continuation of negative funding rates remains a critical indicator for the long-term trend of the market.