As Bitcoin (BTC) makes steady gains, up about 12.3 percent since April 9, exchange data shows that there might still be more upside potential to capture for the premier cryptocurrency.
BTC’s funding rate on Binance is at an extreme low level, which was last seen back in 2020, during the coronavirus pandemic crash.
Bitcoin funding rate falls to COVID-era lows
Bitcoin funding rates on Binance have tumbled to a historic low, rivaling levels last seen during the 2020 pandemic. The following chart confirms the upheaval seen in the Binance Bitcoin derivatives market.
Notably, the 50-day Simple Moving Average (SMA) of BTC’s funding rate on the Binance crypto exchange has slid to -0.002. This is the lowest level this metric has been at since the COVID-induced April 2020 crash.
For the uninitiated, falling funding rates indicate that more traders are opening short positions and betting on Bitcoin’s price declining.
When funding rates turn deeply negative, it signals an overcrowded bearish sentiment, vastly increasing the chances of a sharp short squeeze if prices suddenly rebound.
BTC market extremely skewed towards shorts
Bitcoin has fallen about 37 percent from its October 2025 top of close to $126,200. Now that the digital asset is seeing prolonged negative funding rates, it indicates sheer dominance of bearish sentiment and aggressive short-selling.
Past data shows that when the derivatives market becomes so extremely skewed toward shorts, it acts as a propeller for violent short squeezes and major trend reversals.
The combination of these on-chain metrics strongly suggests that the $80,000 region could well be the macro bottom of the current corrective phase. If the current sentiment persists, then this could very well be the start of the next leg up.
That said, some potential bearish developments could weigh down on BTC’s price. For instance, Michael Saylor’s Strategy is expected to sell some of its BTC holdings, in what many analysts say is a strong departure from the firm’s pro-BTC stance over the past few years.