Funding rates on Binance have turned noticeably negative (-0,0033) just as Bitcoin has quickly bounced back since this past weekend.
Negative funding rates indicate that the majority of open positions are currently short, as investors doubt the sustainability of the recent move.
While this might seem bearish at first glance, markets tend to move against the majority, especially when it comes to an overcrowded short side.
It’s important to understand that the natural bias among traders leans toward longing the market, which makes today’s signal particularly noteworthy.
Looking back to September 2024, each time funding rates on Binance dipped into negative territory, whether in the short or medium term, the market consistently moved in the opposite direction.
The only exception occurred during the announcement of new tariff policies, which temporarily disrupted market dynamics.
If shorts continue to pile up on Binance, they could end up fueling the rally that began earlier this week.
Written by Darkfost
