Funding rates have been negative for 66 consecutive days, yet Bitcoin still rose to around $81k, with institutional hedging being the main reason.

BlockBeats news. On May 5, as the Bitcoin price rose to around $81,000, its 30-day average funding rate for perpetual contracts has remained negative for 66 consecutive days, setting the longest streak in the past decade.

Data shows that in an environment with a negative funding rate, shorts must pay fees to longs, with an annualized cost of about 12%. Despite this, Bitcoin’s price still rose by around 12% in April, while open interest (OI) increased by about 12%, indicating that the market has not shown typical panic-driven short selling.

Analysts say this phenomenon is mainly driven by institutional hedging behavior rather than simply bearish sentiment, including hedge funds shorting futures during redemption cycles, basis trading strategies (going long on related stocks while shorting Bitcoin), and mining companies hedging their Bitcoin assets as they shift to AI computing power businesses.

Historical data suggests that when buying Bitcoin during similar negative funding rate phases, the probability of achieving positive returns within a 90-day period is as high as 83% to 96%. The market generally believes that if the price effectively breaks through the key resistance level of around $82,000, or if a short-covering rally is triggered, it could push the price higher; otherwise, it may drop back to trade in a range of $70,000 to $75,000.