Bullish sentiment is rapidly weakening in the perpetual futures markets for Bitcoin (BTC) and Ethereum (ETH). Funding rates for both assets have fallen below the market-neutral threshold, with bearish bets on Ethereum proving stronger than those on Bitcoin.
According to Coinglass data on the 15th, the Bitcoin funding rate stood at 0.0020%. Ethereum's rate fell to 0.0001%, converging to what is effectively a neutral level. The funding rate is the cost exchanged between holders of long and short positions in perpetual futures; when the figure declines or turns negative, it is read as a signal that more capital is betting on price declines. The market generally classifies anything below 0.005% as a bearish-dominant zone.
Price action also dovetailed with the deteriorating sentiment. In the afternoon of the 15th, Bitcoin was trading at $64,754, down 3.23% from the previous day, while Ethereum plunged 4.84% to $1,805.59. The prior day, the 13th, Bitcoin had also fallen 4.00% over 24 hours to $68,515.90, with Ethereum down 3.56% at $1,925.97.
What market participants are focusing on is the temperature gap between the two assets. In Coinglass tallies, Ethereum's funding rate consistently undercut Bitcoin's. That means investors holding Ethereum futures positions are relatively more active in preparing for further declines.
Note: Funding rates are based on Coinglass tallies. Below 0.005% is classified as a bearish-dominant zone.
The funding rate in futures markets is a mechanism designed to narrow the gap with spot prices. Using 0.01% as the baseline, readings above that indicate bullish sentiment, while readings below 0.005% are interpreted as bearish sentiment prevailing. The fact that both assets sit well below this threshold suggests that leveraged long positions are continuing to be liquidated amid the recent correction.
Derivatives sentiment indicators tend to lead spot supply and demand, making it difficult to rule out the possibility of heightened short-term volatility. That said, some observers note that funding rates shift constantly depending on position composition, so judging whether a trend reversal is underway requires looking at trading volume and open interest trends together.
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