Bitcoin funding rates surge 20% on major exchanges

Bitcoin’s (CRYPTO:BTC) price continues its upward trajectory, reaching new all-time highs over the past week and currently valued at $98,400.

As the flagship cryptocurrency nears the $100,000 milestone, debates persist over short-term targets versus long-term sustainability.

Recent data shows a sharp increase in Bitcoin funding rates, a key metric in the derivatives market that tracks payments between long and short traders.

Funding rates exceeding 20% on major exchanges indicate strong bullish sentiment, as long traders are paying short traders in this scenario.

Conversely, negative funding rates suggest bearish market sentiment, where short traders compensate those holding long positions.

This sharp rise in funding rates signals increased speculative interest but could also hint at overheating, potentially leading to market corrections.

Market intelligence platform IntoTheBlock attributes part of this bullish sentiment to potential policy changes in the U.S., as speculation grows over strategic Bitcoin reserves under Donald Trump’s administration.

Despite the bullish sentiment, caution persists. Glassnode reports that the Bitcoin perpetual futures market remains restrained, with funding rates hovering around 0.01%.

This is well below the levels seen in March 2024 (~0.07%) when Bitcoin reached a local price peak, indicating potential room for further growth.

Speculative activity in the perpetual futures market underscores the delicate balance between optimism and caution among traders.

Investors remain hopeful that Bitcoin will surpass the six-figure threshold, but concerns of a shakeout in the near future remain.

As bullish sentiment grows, the market’s ability to sustain the rally will likely depend on broader macroeconomic trends and evolving regulatory landscapes.

At the time of reporting, Bitcoin price was $98,331.46.