Funding rates on major exchanges dropping to around 50% often mark the bottom of the cryptocurrency market and signal the beginning of a new upward trend.
Most recently in April 2025, when the funding rate reached 54%, Bitcoin rebounded to 112,000 USD, indicating that the upward trend continues, with the 80% funding rate mark seen as a warning threshold for potential adjustments.
MAIN CONTENT
A 30-day funding rate dropping to around 50% is a sign of a market bottom.
Bitcoin strongly recovered after the bottom in April 2025, reaching up to 112,000 USD.
An 80% funding rate is a warning threshold for market adjustment risks.
What is the funding rate and why is it important in forecasting the cryptocurrency market?
According to expert Axel Adler Jr, the funding rate reflects buying/selling pressure among traders on major cryptocurrency exchanges and helps predict near-term price fluctuations.
The funding rate is a fee paid periodically between buyers and sellers in perpetual futures contracts to keep the contract price close to the spot price. When the funding rate is unusually high or low, it indicates overbought or oversold conditions, thus warning of market bottoms or tops.
Why is a funding rate of 50% considered a predictive market bottom?
On-chain data and technical analysis show that the funding rate drops to around 50% (based on 30-day percentile) at milestones such as September 2023, May and September 2024, and April 2025, all coinciding with a significant bottom and expectations of a new upward trend.
This result is compiled from data streams of major exchanges, helping investors pay attention to excessive cooling signals in the market leading to reversals. A market bottom is when selling pressure eases, creating conditions for the next upward trend.
“The funding rate has proven valuable in identifying market bottoms, helping the trading community avoid risks and capitalize on potential upward opportunities.”
Axel Adler Jr, CryptoQuant Analyst, 7/2025
What do the market trends after the April 2025 bottom and the current funding rate reflect?
Bitcoin rose to 112,000 USD after the April 2025 bottom with a funding rate percentile of 54%, continuing to strengthen the bull market trend in the current period.
Experts predict that the market shows no signs of ending the upward trend, while the 80% funding rate will be a crucial testing point to assess the market's heat that could lead to overbought conditions and deeper adjustments.
“An 80% funding rate may warn of excessive excitement; investors should be cautious and closely monitor fluctuations in subsequent trading sessions.”
Axel Adler Jr, CryptoQuant Analyst, 7/2025
Common funding rate levels and their market impacts
Funding Rate Level (%) Meaning Market Impact ~50% Market bottom, strong selling pressure reduction Beginning of an upward trend, buying opportunity 54% (currently) Upward trend still maintained Continued bullish momentum, stable market 80% Overbought, market overheating risk Adjustment warning, investors need to be cautious
Frequently Asked Questions
What is the funding rate and how does it affect cryptocurrency prices? The funding rate is a recurring fee in perpetual contracts that affects supply and demand pressure, helping to predict short-term price fluctuations. Why is a funding rate of 50% considered a market bottom signal? When the funding rate drops to around 50%, it indicates strong selling pressure easing, often signaling a bottom and the beginning of the next upward trend. What does a funding rate of 80% mean for investors? 80% is a warning threshold for an overheated market, increasing the risk of significant price adjustments; investors should be cautious at this level. How has Bitcoin reacted after previous funding rates hit the 50% bottom? Bitcoin usually rebounds strongly after funding rates fall to 50%; for example, in April 2025, it rose to 112,000 USD. Which indicators should investors monitor in conjunction with the funding rate to make decisions? It is advisable to combine funding rate analysis with on-chain data, technical analysis, and market fluctuations on exchanges for a more accurate overall assessment.
Source: https://tintucbitcoin.com/bitcoin-ty-le-cap-von-giam-manh/
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