For the first time in 2025, Bitcoin futures rates have gone negative. This development could indicate a formation of a local price bottom.
Negative Rates: A Sign of Change?
Data from Glassnode shows the funding rate fell to -0.001% on Thursday, marking a rare event in the ongoing bull market. Bitcoin has been trading between $90,000 and $100,000 since mid-November.
Impact of the Derivatives Market
Derivatives such as futures and options contribute to Bitcoin's price fluctuations. A key metric, the futures perpetual funding rate, measures the periodic payments between long and short positions. Positive funding rates are typically observed in bull markets, while negative rates occur in bearish conditions.
Signal for a Local Bottom?
On Thursday, Bitcoin’s funding rate briefly turned negative at -0.001%, sparking a shift in sentiment that pushed prices above $94,000. Although minor compared to historical events, it signals a potential local bottom. Historical data shows short-term negative funding rates coinciding with price bottoms.
The negative turn of Bitcoin's futures rates emphasizes the potential of a local price bottom. Historically, this has been accompanied by significant price recoveries in the context of the ongoing market.
