\n
<\/p>\n
\n\t\t\t\t\t\t\t\t\tHistorical data suggests that periods of persistent negative funding have often come before sharp price jumps for BTC \t\t\t\t\t\t\t\t<\/p>\n<\/p><\/div>\n
Bitcoin\u2019s derivatives market has reached what Real Vision\u2019s Jamie Coutts is calling a state of \u201cexcessive pessimism\u201d after his Derivative Risk Score hit 1.\u00a0Furthermore, the analyst said BTC\u2019s 7-day moving average funding rate has fallen to the third percentile of all readings made since 2020.<\/p>\n
But according to him, in the past, similar sustained negative funding ultimately gave way to huge upsides, with median 90-day gains of more than 43%.<\/p>\n
In a post on X on April 13, Coutts looked at 14 times since 2016 when the main cryptocurrency had negative funding for at least 20 days, and the data revealed<\/a> that after these periods ended, the average return over the next 30 days was 20.8%, with 12 out of the 14 cases ending positively. At the 90-day mark, median returns reached 43.5%, and 11 of the 14 days finished positive.<\/p>\n According to Coutts, there are three close comparisons to the situation currently being experienced: one happening during the 2018-2019 crypto winter, another occurring in 2020 during the COVID crash, and a third that followed China\u2019s banning of BTC mining in 2021.<\/p>\n Soon after all those instances, which involved no less than 48 days of sustained negative funding, there were some pretty big upticks for BTC, with the asset returning 73.4% after 90 days in 2018-2019, 43.5% after the COVID dip, and over 42% in the aftermath of the China Bitcoin mining ban.<\/p>\n The researcher noted that the negative funding stretch from February to March 2026 was the third longest, having gone on for 50 days, with only the run in 2018-19 and the one in 2021 going on longer than it at 83 days and 53 days, respectively.<\/p>\n If those past episodes are anything to go by, then that 50-day period of bearish derivatives positioning could be the setup for a similar recovery.<\/p>\n However, Coutts threw in a few caveats, saying that the 14 episodes he\u2019d analyzed were a \u201cthin dataset\u201d and that there were two exceptions, both in early 2018, when the perp market was \u201cvery immature,\u201d that produced losses of 38% and 32% at 30 and 90 days, respectively.<\/p>\n \u201cThe signal doesn\u2019t distinguish between a bull market correction and a structural bear market,\u201d he wrote.<\/p>\n<\/blockquote>\n Coutts\u2019 assessment has come at a time when Bitcoin is trying to find its footing, following jitters that hit the market after US Vice President JD Vance announced<\/a> that negotiations between the United States and Iran had failed to produce an agreement that would have ended hostilities between the two.<\/p>\n At the time of writing, the asset was trading<\/a> for about $71,000, which is more than 16% less than it was a year ago and almost 44% less than its all-time high of over $126,000 in October 2025.<\/p>\n Meanwhile, another market watcher, Darkfost,\u00a0said<\/a> that nearly $1 billion in sell volume had hit Binance derivatives just an hour after Vance\u2019s statement.\u00a0This pushed funding rates further into negative territory, with Coutts putting it at -1.73% since April 6, meaning the current episode is still developing.<\/p>\n On his part, Darkfost argued that when such a strong consensus forms on the short side, markets often move in the opposite direction. Still, he advised that any upside reaction could be limited if the broader trend stays weak.<\/p>\n LIMITED OFFER for CryptoPotato readers at Bybit: Use this link<\/a> to register and open a $500 FREE position on any coin!<\/b><\/p>\n<\/div>\n<\/div>\nYou may also like:<\/h3>\n
\n
Short Pressure Builds As Analysts Debate Market Direction<\/h2>\n
\nBinance Free $600 (CryptoPotato Exclusive): Use this link<\/a> to register a new account and receive $600 exclusive welcome offer on Binance<\/b> (full details<\/a>).<\/p>\n