For the first time this year, funding rates on Binance have shifted toward a predominance of long positions.

This hasn't happened since the October 2025 top, when funding rates remained consistently below the 0.01% threshold, signaling a dominance of short positions and reflecting the pessimism among traders.

With $BTC delivering a 27% performance over the past 7 days, funding rates have finally turned positive again (>0.01%).

Contrary to popular belief, a funding rate at 0% doesn't indicate a neutral market, it actually reflects short dominance.

On Binance and on other platforms, the calculation formula factors in a base interest rate of 0.01%, which represents the true neutrality threshold. Below that level, shorts dominate, above it, longs take over.

This shift is particularly notable as it follows several episodes of extreme short dominance, marked by negative funding rates. It confirms that sentiment on the futures market is turning bullish again.

This dynamic comes at a pivotal moment: positive demand on futures is now adding to the recent improvement in spot market demand. And it's precisely when these two signals sync up that a durable bullish trend has the best chance of taking hold,which is exactly what we're seeing today.

But be cautious, when an extreme positive level is reached, it can signal the early stages of a trend reversal.

Written by Darkfost