The great derivatives disconnect: Why ‘negative’ funding is actually a bullish signal for Bitcoin
Panelists are split on the four-year cycle’s relevance, with year-end price targets varying widely from potentially not reaching a new high to possible targets of $150k or $250k.
What to know:
- Bitcoin funding rates are extremely bearish (near -4% annualized), signaling heavy short positioning, a rare setup that has historically preceded positive returns.
- Resilient spot ETF demand ($1.6B this month) is shifting the market structure toward a “Wall Street machine,” leading to lower volatility and more strategic allocations.
- Panelists are split on the four-year cycle’s relevance, with year-end price targets varying widely from potentially not reaching a new high to possible targets of $150k or $250k.
“The longs are getting paid, which is quite a rarity,” Aitchison said. “On a 30-day basis, the lowest it has been this decade.”
The setup mirrors a broader derivatives disconnect. Bitcoin funding rates hit their most negative levels since 2023 in April, even as BTC pushed through $75,000 at the time. Aitchison said similar conditions have historically preceded positive returns over 30- to 365-day periods.
Bitcoin has rebounded from roughly $60,000 to the low $80,000s at the of writing. The move has forced traders to reassess whether old crypto-native signals still work in a market increasingly shaped by ETFs, basis trades and Wall Street distribution.
Spot bitcoin ETF demand has held through the drawdown. U.S. spot bitcoin ETFs pulled in $1.6 billion so far this month, even as short-term holders sold.
