Bitcoin derivatives markets flashing warning signs as price plunges below $70,000
Open interest has risen to 773,000 BTC, one of the highest readings on record, while funding rates remain elevated despite weak spot demand and growing market fear.
What to know:
- Bitcoin fell below $70,000 even as open interest climbed to 773,000 BTC and funding rates rose to 10% annualized, indicating leveraged traders are betting on a rebound, rather than reducing risk.
- The Coinbase Premium Index remains deeply negative near -100, highlighting a disconnect between leveraged bullish positioning and weak spot-market demand.
That growing leverage is also reflected in perpetual futures funding rates, which have risen to roughly 10% annualized, according to Coinglass data. Positive funding means long traders are paying shorts to maintain positions. As bitcoin continues to fall, long leverage liquidations occur, sending the price lower.
Broader sentiment remains apathetic. The Crypto Fear & Greed Index continues to signal fear, while the Coinbase Premium Index remains deeply negative at around -100. The metric measures the price difference between bitcoin on Coinbase and offshore exchanges, with a negative reading often indicating weaker demand from U.S. institutional and spot investors — a trend clearly reflected in the continuing outflows from the U.S.-based spot BTC ETFs.
The divergence between leveraged bullish positioning and deteriorating spot demand comes as bitcoin remains largely uncorrelated to broader risk assets, with AI and software stocks continuing to push to fresh highs.
