Bitcoin [BTC] traders are becoming more bearish with every passing second! Interestingly, such extreme negativity has only come close to a local low so far.
Since there are fewer coins available, any change can cause an increase.
BTC funding rates are falling to a long-term low
Bitcoin funding rates are now at their most negative levels since 2023, according to Glassnode’s 7-day MA. At the time of writing, the metric dropped to the -0.004% to -0.005% range; this is the deepest red stretch in recent times.
Short positions dominate the market and traders bet on a bigger decline.
But here’s where it gets interesting. Similar dips in sentiment were observed around March 2020, mid-2021, and during the FTX-led collapse in late 2022; all known bottom phases of the local market.
There is no confirmed reversal yet, but bearish sentiment is once again approaching extreme levels.
Foreign exchange reserves are falling
Meanwhile, foreign exchange reserves have now fallen to approximately 2.68 million BTC. The decline has been steady since early 2025, when reserves were still above 3.0 million BTC. Things have only accelerated since then.
Fewer coins on exchanges means fewer coins available to sell on the market. If buying demand returns while reserves remain so low, the story will quickly change, especially now that the short position is already high.
However, price action is bullish
At the time of writing, Bitcoin was trading around $74K, having recovered from the $66K-$68K range.
The RSI was comfortably above the signal average of 56.17, so the purchasing power is higher. The MACD was also solidly bullish, with the MACD line at 1,342.96 above the signal line at 753.51. The histogram was positive at 589.45.
Bitcoin certainly still has room to go further, especially if the pressure on the short side starts to ease into a squeeze!
Final summary
- Bitcoin‘S Financing rates have fallen to their most negative levels since 2023; The sentiment is very bearish.
- Nevertheless, a short-squeeze-induced rally seems very possible.