Bearish Signal? BTC Drops Below $108K as Funding Rate Flips

• Bitcoin slips to $107K as funding rate turns negative, signaling rising short interest.
• Solana drops 4.7% to $170, holding the sixth-lowest funding rate among tracked crypto assets.
• Cardano drops 3.25% and BNB slides 1.3% amid rising bearish sentiment in the market.

As Bitcoin’s funding rate turned negative, the cryptocurrency market turned more bearish as the price of Bitcoin dropped to $107,486.36, resulting in a 2.32% drop in one day. Glassnode data shows that Bitcoin futures funding rates have turned negative, indicating a rise in short positions. Similar bearish indicators are also present in Binance Coin (BNB), Cardano (ADA), and Solana (SOL).

Negative Funding Rates Indicate Rising Bearish Sentiment

Bitcoin’s funding rate recently turned negative at a key price level, suggesting more sellers than buyers are now active. With the price of a Bitcoin at $107,486.36, its total market value dropped by 2.32% to $2.13 trillion. The drop in the daily trading volume to $48.96 billion reflects reduced market activity and trader caution.

This negative funding rate (-0.0008%) means short sellers pay long position holders, suggesting traders anticipate further price declines. Additionally, daily active Bitcoin addresses declined by 8% to around 700,000, supporting the view that market participants are increasingly cautious or consolidating positions.

Other major tokens reflect similar trends. Binance Coin’s funding rate dropped to -0.0012%, with its price at $682.57. Cardano’s rate fell to -0.0005%, trading at $0.7430. Over the past 24 hours, BNB slipped by 1.30%, while ADA declined 3.25%, showing broader hesitation across altcoin markets.

Solana Faces Heavy Short Interest Despite Strong Network Activity

Solana is currently under significant short-selling pressure, with a funding rate of -0.0036%, the sixth-lowest among all tracked assets by Glassnode Studio. Solana fell by 4.73% to $170.06 but saw an uptick of 4.9% in daily active addresses to reach around 6 million. In just 24 hours, the on-chain transactions on Solana hit $4.8 billion, a 36.5% increase, showing that people are still using it despite low prices.

The sharp contrast between strong network usage and growing short positions in Solana futures could indicate volatility ahead, as derivative traders position for potential price corrections.

Market Implications: Volatility and Short-Term Risks

The high return for holders of these cryptocurrencies makes the market even more likely to experience sudden swings. Bitcoin’s user base enjoys profits, with 97.6% having made a profit, while almost all BNB investors (99.8%) still profit. As prices rise, it could trigger profit-taking, which may increase short-term volatility.

Additionally, significant futures market activity, with Bitcoin’s open interest standing at $57.8 billion, underscores the potential for heightened price volatility. Traders and investors should closely monitor these funding rates, as persistent negativity historically precedes market corrections.

Related: This Bitcoin Trading Method Turned Pullbacks Into Gains This Bull Cycle

Despite short-term bearish indicators, Bitcoin’s dominant market presence and Solana’s vibrant on-chain activity suggest any correction could be short-lived, especially if bearish sentiment eases or reverses quickly.