Sophia Bennett
Crypto Analyst
When Bitcoin's funding rates go negative, most traders panic. They see it as a sign the market is collapsing. But according to some of the sharpest minds in crypto derivatives, they have it completely backwards.
Funding rates have been running near minus 4% annualized, James Aitchison, founder and CIO of Caerus Global, said during a panel at Consensus Miami 2026. That means longs are actually being paid to hold their positions, a rare and historically significant setup.
"The longs are getting paid, which is quite a rarity," Aitchison said. "On a 30‑day basis, the lowest it has been this decade."
What Negative Funding Actually Means
Here is the simple version. In perpetual futures markets, funding rates are periodic payments between longs and shorts to keep the contract price anchored to spot.
When the rate turns negative, shorts pay longs, indicating a market skewed toward downside bets. It reflects crowded short positioning, not necessarily a falling market.
BTC perpetuals posted a negative 30‑day average funding rate for 46 consecutive days as of mid‑April 2026, the longest sustained negative funding streak since November 2022, when Bitcoin was grinding through post‑FTX wreckage below $16,000.
That context matters enormously. The last time this happened, Bitcoin was near its cycle bottom.
History Says This Ends With a Squeeze
Bitcoin funding rates hit their most negative levels since 2023 in April, even as BTC pushed through $75,000. Aitchison said similar conditions have historically preceded positive returns over 30 to 365‑day periods.
This pattern has played out across multiple market cycles. In March 2020, during the COVID‑19 crash, Bitcoin fell to around $3,000 as funding rates turned sharply negative. A similar setup emerged in mid‑2021 amid China's mining ban, when prices dropped to $30,000. Both times, what followed was a significant upside reversal.
The last two times this exact setup appeared, both resolved with violent upside moves that liquidated the short side within weeks.
Bitcoin Has Already Started Moving
The market is not waiting for confirmation. Bitcoin has already rebounded from roughly $60,000 to the low $80,000s, forcing traders to reassess whether old crypto‑native signals still work in a market increasingly shaped by ETFs, basis trades, and Wall Street distribution.
That is the real story here. The derivatives market was overwhelmingly short. Spot price went the other way. The shorts got squeezed, exactly as the historical playbook suggested they would.
Wall Street Is Changing the Game
Options are accelerating that shift. IBIT options open interest topped Deribit in April, pointing to a migration of Bitcoin derivatives activity into regulated US venues. Morgan Stanley's Bitcoin ETF opened just last month, adding another large wealth‑management platform to the market.
Traditional finance is now setting the tempo, and traditional traders do not short assets the way crypto‑native participants do. That structural change may make crowded short setups even more unstable, and the resulting squeezes even more violent.
Where Prices Go From Here
The panellists at Consensus were not in agreement on the year‑end target, but that itself tells a story.
Terpin and Backmore said Bitcoin may not reach a new high this year. Cole Kennelly, founder of Volmex Labs, said $250,000 is possible. Aitchison said $150,000 is a reasonable target if rate cuts return.
Panellists were split on whether the four‑year halving cycle still matters, with some arguing it is losing force as Bitcoin becomes a TradFi asset.
What everyone agreed on is that the derivatives market was sending a clear signal, and most people missed it. Negative funding was never the warning sign they thought it was. It was the setup for the next move higher.
