BTC funding rates on Binance have just turned negative, at -0.0073%.

When funding rates turn negative, it indicates that the majority of traders are now positioned short. The overall sentiment in derivatives is therefore clearly bearish.

The last time this happened was in June, when BTC was trading around $62,000.

In Binance's funding rate formula, an interest rate of 0.01% is applied. When analyzing the balance between buyers and sellers, the neutral funding rate is therefore not 0% but 0.01%. As a result, when the funding rate falls below 0%, shorts dominate by a wide margin.

This is an interesting signal, especially as macroeconomic news has been rather poor this week: both CPI and PPI came in hotter than expected, which raises the odds of an upcoming rate hike.

This bearish consensus also comes as BTC has already corrected significantly after surpassing $87 000 a few days ago. It is often at this precise moment that the market tends to react in the opposite direction. Historically, such phases have frequently preceded trend reversals, sometimes lasting, sometimes limited to the very short term.

Even though this signal is interesting, it remains essential to plan entries carefully, relying in particular on key technical levels. Current technical analysis highlights two major areas of interest $80 000 and $74 000.

Written by Darkfost