Funding rates on Binance, which reflect the cost of holding long or short positions in perpetual futures, have stayed negative for six of the past seven days, now hovering around -0.004%, according to CryptoQuant.
Negative funding rates indicate that short positions outweigh longs, showing that traders expect prices to fall further.
This cautious mood comes after the massive liquidation wave on Oct. 10, which wiped out billions in leveraged long positions. That event shook trader confidence, making many hesitant to believe in any new uptrend.
Even as prices recovered, traders kept shorting Bitcoin, expecting the rally to fade. This mindset often marks what analysts call the “disbelief phase,” when markets begin to recover, but most participants are still mentally stuck in the previous downturn.
Ironically, this disbelief can help push prices even higher. When Bitcoin rises while many traders are short, it can trigger a short squeeze, a chain reaction of forced buybacks that rapidly lifts prices.
For instance, in September 2024, negative funding rates preceded a rally from $54,000 to over $100,000. Then again in April 2025, the same pattern helped Bitcoin surge from $85,000 to $123,000.
