Bitcoin Funding Rates Plunge for the 4th Time in 2025 — Is This the Calm Before the Storm?

Bitcoin’s funding rates just nosedived again—marking the fourth major dip this year. Traders are either panicking or licking their chops, depending on which side of the leverage they’re on.

What’s behind the drop? Cooler heads say it’s just market mechanics at work (yawn), while the degens are already placing bets on the next violent reversal. Meanwhile, Wall Street ’experts’ are still trying to explain Bitcoin’s 2013 rally.

One thing’s clear: when funding rates flip negative, things get interesting. Time to strap in—BTC’s next move could be a doozy.

Bitcoin Funding Rates Drop Despite Rising Prices

According to Nino, an analyst from CryptoQuant,  the Bitcoin funding rate—typically used to gauge sentiment in the perpetual futures BTC market has again dipped into negative territory, even as whale accumulation continues on major exchanges like Binance and Coinbase.

Nino particularly identified a notable development in Bitcoin’s derivatives market. The 72-hour average of BTC funding rates, including moving average indicators (MA, EMA, WMA), has entered negative territory for the fourth time this year.

Funding rates refer to periodic payments made between long and short positions on perpetual futures contracts, with negative rates meaning short positions are paying long positions. This generally reflects that the market is either positioning defensively or becoming cautious at current price levels.

What makes this instance notable is that previous dips into negative funding rates occurred at lower price levels, whereas the current shift has taken place above $94,000.

Nino suggests this may point to potential market exhaustion or a phase of profit-taking, where short traders are more active despite upward price movement. If volatility increases and funding rates remain suppressed, a spike in liquidations could follow, especially if open interest in Leveraged positions expands rapidly.

Coinbase Premium and Whale Behavior Reflect US Investor Activity

In a separate analysis, CryptoQuant analyst Crypto Dan noted a trend reversal beginning around April 21, accompanied by renewed buying from large holders, or “whales.” Notably, these purchases were first identified on Binance and were soon followed by similar activity on Coinbase.

According to Dan, this pattern may indicate rising confidence among US-based investors and growing participation from institutions or high-net-worth individuals.

One supporting metric is the Coinbase premium, which tracks the price difference between BTC on Coinbase and other global exchanges. A positive premium typically reflects stronger demand from US investors.

As of now, this premium remains in positive territory, suggesting that US market participants are contributing to BTC’s recent momentum. Dan concludes that the current phase may signal more than a typical price rebound and could represent a broader shift in market structure, driven by renewed capital inflows and institutional positioning.

Featured image created with DALL-E, Chart from TradingView