Worst Funding Rate Suggestion on BTC Bounce

Long-term earnings levels have turned negative in all major markets, indicating that short sellers are paying to maintain bearish positions.

Bitcoin’s permanent support rate on major exchanges has turned negative, indicating that short sellers now dominate the derivatives market and are paying to keep their positions open.

While negative support often conveys bearish sentiment, one analyst interprets the current overshoot as a potential short-storage setup, arguing that an overly short stop often precedes a sharp pullback rather than a continuation down.

Funding Takes a Bad Turn as Shorting Fills the Market

In a market update on February 27, analyst Amr Taha noted that the support rates in all major derivatives markets moved into negative territory, Binance at -0.005%, OKX at -0.007%, and Bybit at -0.011%.

Funding ratios are periodic payments between long and short traders in the future, and when they become negative, it means that short sellers are paying long, which indicates a dominant bearish position.

Taha also pointed to data from BTC’s closing heatmap showing dense clusters of available positions above the current price, many from the $92,000 level. According to the analyst, if Bitcoin pushes higher, those short positions may be forced to close, accelerating the opposite trend.

“If macroeconomic conditions improve, it is likely that the price pump will be renewed in the short to medium term,” Taha wrote.

They added that historically, very short exposures combined with negative funding often predict sharp pullbacks, although the metric alone does not predict direction.

Meanwhile, sales work is also underway. Nino, a CryptoQuant contributor, showed that the frequency of trading among small investors has increased compared to its one-year average, a sign that individual participants are reentering the market after many weeks of caution.

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“The current spike underscores a growing sense of anticipation for the next big market surge,” the analyst explained.

Whale Flow and Market Structure

In another post, Taha tracked nearly 1,700 BTC in positive net inflows from so-called “Octopus” wallets, representing medium-term holders, on Binance. A larger inflow of 5,000 BTC from the same group on February 2 preceded the decline from above $77,500.

In this case, the movement, although good, is not very strong, which suggests that it may not have the same power.

“Of course, the market reaction also depends on the currency conditions and the broader situation,” said Taha. “But from the chart data – low power.”

Bitcoin briefly tested $70,000 on February 26 but failed to hold that threshold, hovering between $66,600 and $68,600 over the past 24 hours according to CoinGecko data, with observers at Glassnode saying that despite the relative stability, the BTC market is yet to recover.

At the time of writing, the flagship cryptocurrency was trading about 200 dollars below the $68,000 level, a slight decrease of 0.4% in the last 24 hours and unchanged in seven days. However, on a 30-day basis, the stock is about 24% lower, and about 46% below its October 2025 high.