$BTC Funding Rates Hit 3-Year Lows After Historic #Liquidation


On-chain analytics firm Glassnode reported Sunday that #funding rates across crypto derivatives have dropped to their lowest point since the 2022 bear market. The firm described this as one of the most severe #leverage resets in crypto history, highlighting how aggressively speculative excess has been removed from the system.


Funding rates represent periodic payments between traders in perpetual futures contracts, the most popular crypto #derivatives. These mechanisms keep perpetual contract prices aligned with spot market values.


Extremely low or negative funding rates indicate a greater number of short positions than longs, signaling that derivatives speculators anticipate price declines. Traders are willing to pay to maintain these short positions.


However, such dramatically low funding rates can paradoxically signal bullish conditions. The market may be oversold with excessive shorts, creating potential for a short squeeze if prices begin to rise.

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October 13, 2025 at 1:52 PM